NYC Local Law 144: bias audit requirements, AEDT rules, and employer checklist

Enforcement is tightening. Are you ready?

In December 2025, the New York State Comptroller released a damaging audit of how NYC's Department of Consumer and Worker Protection (DCWP) has been enforcing Local Law 144, the city's regulation on automated employment decision tools (AEDTs).

The numbers were bad. Seventy-five percent of test calls to the NYC 311 hotline about AEDT issues were misrouted and never reached DCWP.

The agency surveyed 32 companies and found just one case of non-compliance, while the Comptroller's auditors reviewing the same companies identified at least 17 potential violations.

DCWP has agreed to fix this: better complaint handling, cross-trained staff, and more rigorous investigations. As DLA Piper noted, employers should expect a new phase of stricter enforcement with more frequent investigations and higher penalties.

If you use AI anywhere in your hiring pipeline for roles that touch New York City, here is what you need to do right now.

What counts as an AEDT?

Before walking through the checklist, it helps to understand what the law actually covers.

An automated employment decision tool is any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues a simplified output (score, classification, or recommendation) used to substantially assist or replace discretionary decision-making for employment decisions.

In practical terms, this includes:

• Resume screening tools that rank, filter, or score candidates
• Video interview platforms that analyze facial expressions, tone, or word choice
• Chatbot assessments that evaluate candidate responses
• Candidate matching algorithms that recommend candidates for roles
• Internal promotion tools that score employees for advancement

The key phrase is "substantially assist or replace." If a human decision-maker reviews AI-generated scores or rankings as a significant factor in hiring, that tool is likely an AEDT.

The 7-step compliance checklist

Step 1: Inventory every AI tool in your hiring pipeline

Start by mapping out every tool that touches candidate evaluation. This includes tools you built in-house and tools provided by vendors.

Many companies are surprised to find AEDTs embedded in applicant tracking systems, recruitment marketing platforms, or assessment providers they assumed were purely manual.

What to document for each tool:

• Tool name and vendor
• What it does (screening, scoring, ranking, matching)
• What data it ingests (resumes, video, assessment responses)
• Whether it produces a score, classification, or recommendation
• Whether that output substantially assists or replaces a human decision

If a vendor provides the tool, contact them about their Local Law 144 compliance posture. Note that the law does not impose direct obligations on vendors, so cooperation depends on your contractual relationship.

Step 2: Determine if you are in scope

Local Law 144 applies to employers and employment agencies that use AEDTs to evaluate candidates or employees who reside in New York City. Your company does not need to be based in NYC. If you are hiring for a remote role and a candidate lives in any of the five boroughs, the law applies to that candidate's evaluation.

You are in scope if:

• You have employees in NYC
• You evaluate job applicants who reside in NYC
• You use AEDTs for promotions of NYC-based employees
• You are an employment agency placing candidates in NYC roles

Step 3: Select an independent auditor

The law requires that an independent auditor conduct the bias audit. DCWP does not maintain an approved list of auditors, so the selection is your responsibility.

What to look for in an auditor:

• The auditor must not have a financial interest in the AEDT being audited. A vendor cannot audit its own tool, but it can coordinate data collection for a third-party auditor.
• Look for experience with adverse impact analyses, disparate impact testing, and the four-fifths rule. The IAPP has practical guidance on what makes a qualified auditor.
• The auditor should clearly document their approach, data requirements, and analytical methods.

Step 4: Conduct the bias audit

The bias audit must calculate the selection rate (or scoring rate) for each demographic category and the impact ratio, which is the ratio between each group's rate and the group with the highest rate.

Required demographic categories:

• Sex (including male, female, and non-binary/other)
• Race/ethnicity (all EEOC categories)
• Intersectional categories (sex crossed with race/ethnicity)

How impact ratios work:

If men are selected at a rate of 60% and women at 40%, the impact ratio for women is 40/60 = 0.67 (67%). Under the four-fifths rule, an impact ratio below 80% may signal adverse impact against that group.

The audit must use either historical data from the tool's actual use or test data if historical data is insufficient. The auditor documents findings in a summary report.

Step 5: Publish the audit results

You must make the bias audit results publicly available on your website. The published summary must include:

• The date of the most recent bias audit
• The distribution of the AEDT's results across the required demographic categories
• The source and explanation of the data used
• The number of individuals assessed by the AEDT

There is no prescribed format, but the information must be clearly accessible. Many companies create a dedicated compliance page or add it to their careers section.

Step 6: Notify candidates and employees

Before using an AEDT, you must provide notice to candidates or employees at least 10 business days before the tool is used. The notice must include:

• That an AEDT will be used in the assessment
• The job qualifications and characteristics the AEDT will evaluate
• The type of data collected for the AEDT
• The source of the data
• Your data retention policy

Candidates must also be informed of their right to request an alternative selection process or accommodation, where reasonably available.

Where to provide notice:

• In the job posting itself
• In a separate written communication (email, letter) at least 10 business days before use
• On your careers page in a conspicuous location

Step 7: Build an annual compliance cadence

The bias audit must be conducted at least once every 12 months. You cannot use an AEDT if more than one year has passed since its most recent audit.

Recommended annual calendar:

If you change the AEDT's configuration, retrain a model, or switch vendors mid-cycle, evaluate whether a new audit is needed.

Common mistakes to avoid

Thinking the law only applies to NYC-based companies. It applies to any employer evaluating candidates who reside in NYC, regardless of where the company is headquartered.

Ignoring vendor-provided tools. If your ATS vendor includes AI-powered screening, that is an AEDT. The compliance obligation falls on you as the employer, not the vendor.

Treating the audit as a one-time event. Audits expire after 12 months. Many companies completed their first audit in 2023 and have not updated since.

Not offering an alternative process. The law requires you to inform candidates they can request an alternative. If you have no alternative available, you should document why and consider establishing one.

Publishing audit results in an inaccessible location. Burying the summary in a PDF behind multiple clicks may not satisfy the public availability requirement. Make it easy to find.

What the Comptroller's audit means for employers

The December 2025 Comptroller's audit matters for two reasons.

First, it showed that DCWP's enforcement has been minimal. Many companies have not faced scrutiny, which may have created a false sense of security.

Second, DCWP has committed to fixing every gap the Comptroller identified. That means improved complaint routing, better-trained investigators, and more proactive enforcement.

The agency will likely move from reactive to actively seeking out non-compliant employers.

Companies that are not yet compliant should treat this as the window to get things sorted before enforcement ramps up.

How VerifyWise helps

VerifyWise covers the core quantitative requirements of Local Law 144: the actual bias audit computation, demographic category analysis, intersectional breakdowns, and compliance record-keeping.

Here is what the platform provides mapped directly to each LL144 requirement.

VerifyWise also handles AEDT inventory management, candidate notice templates, and audit publication tracking.

If you're working on Local Law 144 compliance, get in touch to discuss your situation.

Further reading

• NYC DCWP official AEDT page
• DCWP AEDT FAQ document
• NY State Comptroller enforcement audit (December 2025)
• IAPP practical considerations for bias audits
• Deloitte NYC Local Law 144 overview
• NYC AEDT final rules