By 
The New York State Comptroller's December 2025 audit did not describe a crackdown - it described the opposite. The audit found that DCWP had received only two AEDT complaints during a nearly two-year window, that 75% of test calls made to 311 about AEDT issues were misrouted and never reached DCWP, and that DCWP's internal review of 32 companies surfaced one non-compliance issue while Comptroller auditors reviewing the same companies identified at least 17. DCWP has agreed to strengthen complaint routing, staff training, and investigative procedures.
That matters for employers in two ways. First, anyone who interpreted light past enforcement as a reason to deprioritise Local Law 144 compliance should now recalibrate - the gap identified by the Comptroller is exactly the gap DCWP is under public pressure to close. Second, the specific non-compliance patterns the Comptroller surfaced (missing bias audit summaries on the employment section of the website, missing candidate notices, inadequate data source disclosures) are the patterns a newly activated DCWP is most likely to check first.
What Local Law 144 actually requires
New York City Local Law 144 of 2021 prohibits employers and employment agencies from using an Automated Employment Decision Tool (AEDT) to substantially assist or replace discretionary decision-making for hiring or promotion unless the tool has been subject to a bias audit by an independent auditor within the last year, the results have been made publicly available, and required candidate notices have been provided.
The law went into effect on 1 January 2023 but DCWP enforcement began on 5 July 2023. The final DCWP rules adopted on 6 April 2023 specify the audit methodology, exclusion thresholds, publication format, and notice content.
What counts as an AEDT
Under the final rules, an AEDT is any computational process derived from machine learning, statistical modelling, data analytics, or artificial intelligence that produces a simplified output - a score, classification, tag, or recommendation - that is used to substantially assist or replace discretionary decision-making in a hiring or promotion decision. "Substantially assist or replace" means the AEDT is either the sole determinant, the primary factor, or has the capability to override other factors (including human judgement). Tools that only translate or transcribe text are not AEDTs. Most modern applicant tracking systems with embedded scoring, ranking, or recommendation features will qualify.
Scope - when the law applies
According to DCWP's published FAQs, Local Law 144 applies when an employer or employment agency uses an AEDT to evaluate:
- A candidate or employee residing in New York City, for any position; or
- A candidate for a position located in New York City (at least part-time); or
- A candidate for a remote position that is associated with an office in New York City.
Employment decisions need not be final to be covered - early-stage screening, shortlist generation, and promotion shortlists are all in scope. Outreach to potential candidates and invitations to apply sit outside the scope under the FAQs.
The bias audit
The audit must be conducted by an independent auditor: a person or group that exercises objective and impartial judgement, has not been involved in using, developing, or distributing the AEDT, and has no material financial interest in the employer, employment agency, or AEDT vendor. DCWP does not maintain an approved-auditor list - the employer is responsible for verifying independence.
The audit calculates selection rates (for pass/fail tools) or scoring rates (for tools producing continuous scores, measured as the proportion of candidates scoring above the overall median) and impact ratios across:
- Sex categories (as reported to the EEOC)
- Race and ethnicity categories (as reported to the EEOC)
- Intersectional categories combining sex and race/ethnicity (e.g., Hispanic women, Asian men)
The impact ratio for a group equals that group's selection rate divided by the highest group's selection rate. Under the EEOC's four-fifths rule, an impact ratio below 0.80 is a signal of potential adverse impact - not an automatic violation, but a flag regulators and plaintiffs' lawyers examine closely.
Three methodology details matter in practice:
- Independent auditors may exclude a category representing less than 2% of the data set from impact ratio calculations, but the exclusion must be identified in the summary.
- The summary must state the number of individuals assessed who fall in an unknown category for sex or race/ethnicity.
- The audit must use historical data from actual applicants. Test data is permitted only when historical data is insufficient for statistically significant analysis, and the summary must explain why historical data was insufficient and how the test data was generated. Inferred or imputed demographic data is not permitted.
Publication
Before using the AEDT, the employer must publish a summary of the bias audit on the employment section of its website in a clear and conspicuous manner. The summary must include:
- Date of the most recent audit
- Source and explanation of the data used
- Number of applicants or candidates assessed
- Selection or scoring rates for each category
- Impact ratios for each category and each intersectional combination
- Number of individuals in the unknown category
- Distribution date of the AEDT
The summary must remain posted for at least six months after the employer's last use of the AEDT.
Candidate notice
Employers must notify NYC-resident candidates at least 10 business days before the AEDT is used. The notice must disclose:
- That an AEDT will be used to assess the candidate
- The job qualifications and characteristics the AEDT will evaluate
- The types of data collected, the sources of that data, and the employer's data retention policy (if not already disclosed elsewhere, the policy must be available within 30 days upon written request)
- Instructions for requesting an alternative selection process or an accommodation
Penalties and enforcement
DCWP has exclusive enforcement authority under Local Law 144. Under the DCWP penalty schedule, civil penalties are:
- $375 for the first violation
- $500 for each additional violation on the same day as the first
- Between $500 and $1,500 for each subsequent violation
Critically, each day an AEDT is used without a current bias audit, and each failure to provide a required notice to a candidate or employee, is a separate violation. Bias audit, publication, and notice violations are counted separately - a single non-compliant deployment can generate multiple parallel violation counts.
Local Law 144 itself does not create a private right of action and does not prohibit the use of an AEDT that produces adverse impact. Discrimination claims arising from AEDT use are handled separately - under the New York City Human Rights Law and referred to the NYC Commission on Human Rights, and potentially under federal anti-discrimination law including Title VII via EEOC. Non-compliance with Local Law 144 can sit alongside these broader claims.
A five-step compliance plan
Step 1 - Inventory every tool that could be an AEDT
Survey every system that scores, ranks, classifies, or recommends candidates or employees for hiring or promotion. Pay particular attention to embedded AI features in widely used ATS platforms (Workday, Greenhouse, Lever, iCIMS, Lattice), video interview tools, skills-assessment platforms, and résumé parsers. For each, document: tool name, vendor, version, whether the output substantially assists or replaces discretionary decision-making, data inputs, deployment geography, and the hiring or promotion stage at which it is used.
Step 2 - Confirm the NYC nexus for each system
For each in-scope tool, map the candidate and role population it actually evaluates. Flag any tool that evaluates NYC-resident candidates, candidates for NYC-located positions, or candidates for remote positions associated with an NYC office. Update applicant tracking system logic so the compliance workflow triggers automatically for flagged roles. Include promotions of NYC-resident employees, which are easy to miss.
Step 3 - Engage a qualified independent auditor
Verify the auditor has no prior involvement in developing, distributing, or using the tool and no material financial interest in either your organisation or the vendor. Require a signed written independence attestation and a scope document covering the exact sex, race/ethnicity, and intersectional calculations required, along with the treatment of the 2% exclusion and unknown-category disclosure. Provide historical application data wherever possible; use test data only with clear justification in the audit summary.
Step 4 - Publish the summary and issue candidate notices
Post the full summary on the employment section of your website before first use, in a clearly visible location (not buried deep in a career-site sub-page), and keep it live for at least six months after last use. Templated candidate notices should be built into the application flow, delivered at least 10 business days before AEDT use, and include a functional alternative-process or accommodation request channel. Log notice delivery, candidate acknowledgements, and accommodation requests with timestamps.
Step 5 - Build a documentation package that survives a DCWP inquiry
The compliance evidence you want ready before any inquiry arrives typically includes:
- AEDT inventory with the "substantially assists or replaces" analysis for each tool
- Signed auditor engagement letters with independence attestations
- Full bias audit reports, not just summaries - historical data sets, methodology notes, statistical analyses, category tables with selection/scoring rates and impact ratios, intersectional combinations, and handling of the 2% and unknown categories
- Screenshots or archive captures of the published website summary, with timestamps
- Candidate notice templates, delivery logs, and accommodation request tracking
- Data governance policy covering consent, retention, and the prohibition on demographic inference
- An annual attestation of compliance signed by a named senior officer, covering ongoing monitoring and human override processes
Who carries the liability
Local Law 144 places obligations on employers and employment agencies using AEDTs. Vendors are not liable under Local Law 144 itself, and the DCWP FAQs clarify that vendors are not responsible for conducting the bias audit on behalf of users. A vendor can, however, commission a bias audit on its own tool from an independent auditor and share the results with customer employers, who may then rely on that audit if it covers the configuration they deploy.
Practical consequence: your vendor cannot solve your Local Law 144 compliance problem for you. Contracts with AEDT vendors should require: timely delivery of model cards and configuration documentation, access to historical aggregate data needed for audits, cooperation with independent auditors chosen by the employer, known-limitation disclosures, and indemnification for undisclosed foreseeable harms. Vendors that will not contract on these terms create downstream compliance exposure the employer alone will carry.
An illustrative scenario
The following is a hypothetical designed to illustrate how the rules interact. It does not describe any real enforcement action.
Imagine a national recruitment agency uses an AI video-interview tool for roles at a Manhattan-headquartered client. An NYC-resident candidate notices there is no bias audit summary on the agency's employment website and files a 311 complaint that routes correctly to DCWP (following the Comptroller's recommended fixes). DCWP opens an inquiry.
The agency's defensible response would involve pausing the tool, engaging a qualified independent auditor, running the audit on historical data covering candidates assessed over the past 12 months across comparable roles, and publishing the full summary - including any intersectional categories with impact ratios below 0.80, properly disclosed. Updated notices go out for active pipelines, and human-review gates are added for candidates scoring below a defined threshold. The remediation cost is dominated by auditor fees and internal engineering time, not DCWP fines - because the daily violation clock stops once audit, publication, and notice obligations are met.
The scenario where costs balloon is the opposite posture: continuing to use the tool after a complaint without pausing, publishing, or issuing notices. Each day in that state multiplies violations across the $500–$1,500 range, and the underlying adverse impact (if any) creates a separate NYCHRL or Title VII exposure that Local Law 144 itself does not foreclose.
Compliance FAQ
What does the NYC Local Law 144 bias audit actually have to produce?
An audit performed by an independent auditor within the previous 12 months, calculating selection or scoring rates and impact ratios for sex, race/ethnicity, and intersectional combinations, using historical data where possible and test data only with justification. The audit must disclose the number of individuals in the unknown category and any category excluded under the 2% threshold. The summary goes on your website before first use and stays live for at least six months after last use.
Who qualifies as an independent auditor?
A person or group that exercises objective and impartial judgement, has not been involved in using, developing, or distributing the AEDT, and has no employment relationship with and no material financial interest in the employer, employment agency, or vendor. DCWP does not pre-approve auditors - the burden is on the employer to verify independence and document it.
How often must the audit be renewed?
Annually. Any audit older than 12 months disqualifies the tool from lawful use until a fresh audit is completed and published.
What is DCWP likely to check first in 2026?
The Comptroller's December 2025 audit identified missing website bias audit summaries as the most visible non-compliance signal - DCWP can check this from outside without a complaint. Expect expanded website-based surveillance, plus better-routed 311 and online complaint intake following the Comptroller's recommended fixes. Employers whose careers page has no visible bias audit summary should treat that as the highest-priority gap to close.
Does the vendor's bias audit cover my obligations?
Potentially, yes - if the vendor's audit is conducted by a qualified independent auditor, uses data representative of your deployment, and covers the tool configuration you actually use. DCWP's final rules and FAQ permit reliance on a bias audit based on multi-employer historical data in specified circumstances. You are still responsible for publishing the summary on your own employment website and for issuing candidate notices; the vendor cannot do either for you.
How does Local Law 144 interact with NYC Human Rights Law and Title VII?
Local Law 144 is a procedural transparency and audit law - it does not prohibit using an AEDT that produces adverse impact. Claims that the AEDT actually caused unlawful discrimination go to the NYC Commission on Human Rights (under NYCHRL) and the EEOC (under Title VII), and can be brought in addition to any DCWP enforcement. A bias audit below 0.80 impact ratio is not by itself a violation of Local Law 144, but it is material evidence in an NYCHRL or Title VII proceeding.
The bottom line
Enforcement has been thin. The Comptroller made that public, named the gaps, and secured DCWP commitments to close them. The practical effect for employers is that the historical under-enforcement is now documented and politically visible - which is generally the condition that precedes a noticeable change in enforcement intensity.
The compliance mechanics are well specified and stable: inventory, NYC nexus check, independent audit, published summary, candidate notice, documented alternative process. Companies that treat these as a single annual cycle rather than a project tend to spend less over a multi-year horizon than companies that remediate under a DCWP inquiry. Start with the inventory, publish the summary before first use, and keep the binder ready.
Last updated: April 2026. This article is educational content and is not legal advice. Local Law 144 obligations depend on specific facts, including AEDT configuration, NYC nexus, and role types. Consult qualified employment counsel before making compliance decisions.