New York City’s Local Law 144 of 2021 was among the first laws anywhere to regulate the use of automated decision tools in hiring. Enforcement by the city’s Department of Consumer and Worker Protection (DCWP) began on July 5, 2023. The law targets “automated employment decision tools” (AEDTs) - software that uses machine learning or statistical modeling to substantially assist or replace human judgment in hiring and promotion decisions.
The city’s official guidance summarizes the core obligation: the law “prohibits employers and employment agencies from using an automated employment decision tool unless the tool has been subject to a bias audit within one year of the use of the tool, information about the bias audit is publicly available, and certain notices have been provided to employees or job candidates.” In practice that means three steps for employers: have an independent bias audit done, post a public summary of its results, and give candidates advance notice - DCWP clarified that the notice “must be provided 10 business days prior to use of an AEDT.” The bias audit examines whether the tool produces disparate outcomes across sex and race or ethnicity categories.
The law applies to jobs in New York City and carries civil penalties for violations. It does not ban the tools; it requires testing, transparency and notice as conditions of using them.
Why business readers should care: Local Law 144 created a concrete compliance regime for AI in hiring - independent auditing, public disclosure of results, and candidate notice - well before most jurisdictions acted. It established the “bias audit” as a regulatory instrument and previewed the kind of transparency obligations that broader frameworks like the 2024-eu-ai-act would later apply to high-risk employment uses. Later government reviews questioned how effectively the city enforced it, a reminder that disclosure mandates depend on enforcement to have effect.