Frequently asked questions about NYC Local Law 144

The text below each FAQ links to the page section with the full rule.

Disclaimer

This page gives general information. It is not legal advice.

What is NYC Local Law 144?

NYC Local Law 144 gives obligations to employers and employment agencies that use automated employment decision tools (AEDTs) to screen candidates or employees in the city. The law took effect on January 1, 2023, and DCWP enforcement started on July 5, 2023.

An employer or employment agency must not use the AEDT unless the two conditions of § 20-871(a) apply together:

• A bias audit not more than one year before use (§ 20-871(a)(1), bias audit).
• A summary of the results of the most recent bias audit and distribution date publicly available on the website of the employer or employment agency before use (§ 20-871(a)(2), results on the website).

Section 20-871(b) gives different obligations for notice and data disclosures:

• Notice to screened employees and candidates who applied, if they reside in NYC, not less than 10 business days before the tool assesses them (§ 20-871(b), notice).
• Disclosures of data type, source, and their data retention policy, with a prohibition and explanation if disclosure violates law or interferes with a law enforcement investigation (§ 20-871(b)(3), disclosures).

See Obligations of the law.

Who is covered by Local Law 144?

NYC Local Law 144 applies to employers and employment agencies that use an AEDT to screen candidates for employment or employees for promotion in the city. Vendors have no obligation unless they are also such an employer or employment agency.

The law and rules give no definition of “in the city”. DCWP FAQ I.4 (not law) gives alternatives:

• The job location is “an office in NYC, at least part time”.
• The position is “fully remote but the location associated with it is an office in NYC”.
• The employment agency is in NYC, or is not in NYC and one of the first two conditions applies.

The notice applies to screened employees and candidates who applied, only if they reside in NYC (§ 20-871(b)). See Persons and location and Who is responsible.

What is an automated employment decision tool under Local Law 144?

An AEDT in NYC Local Law 144 is a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that gives simplified output. The output must substantially assist or replace discretionary decision making for employment decisions that impact natural persons.

All parts of the definition must apply, with these other tests:

• Prediction or classification, and computer identification, fully or in part, of inputs and their relative importance (6 RCNY § 5-300, computer-based tests).
• Output used only, “with no other factors considered”, given more weight than each other criterion, or used “to overrule conclusions derived from other factors including human decision-making” (§ 5-300, uses).

The § 20-870 exclusion applies only if the two conditions apply together:

• The tool does not automate, support, substantially assist or replace discretionary decision-making processes.
• The tool does not materially impact natural persons.

See Definition and exclusion.

What must a Local Law 144 bias audit contain?

A NYC Local Law 144 bias audit is an impartial evaluation by an independent auditor, with these minimum calculations for the tool's functions:

• Selection or classification: selection rates and impact ratios for each category (§ 5-301(b)).
• Scores: full-sample median, scoring rates, and impact ratios for each category (§ 5-301(c)).
• A tool with the two functions must have the two sets of calculations.
• Calculations “separately” for sex, race/ethnicity, and intersectional categories, calculations for each classified group, and counts of individuals in an unknown category (§ 5-301(b)–(c), calculations).
• The independent auditor can exclude categories below 2% from impact ratios only, with justification, applicant counts, and selection or scoring rates in the summary of results (§ 5-301(d), exclusion).

What data can a Local Law 144 bias audit use?

A NYC Local Law 144 bias audit must use historical data from one or more employers or employment agencies, unless historical data is not sufficient. An employer or employment agency can use others' historical data only if it gave the independent auditor historical data from its use of the AEDT or “has never used the AEDT”.

Test data is permitted only if historical data is not sufficient for a statistically significant bias audit (§ 5-302(b)). The summary of results must then “explain why historical data was not used and describe how the test data used was generated and obtained”. DCWP FAQ III.6 (not law) excludes imputed or inferred demographic information. See Data rules.

Does Local Law 144 require an employer to fix a biased tool?

No. NYC Local Law 144 sets no minimum impact ratio for employers or employment agencies. DCWP FAQ II.2 (not law) tells them that the law “does not require any specific actions based on the results of a bias audit”.

But employers and employment agencies “must comply with all relevant Anti-Discrimination laws and rules to determine any necessary actions based on the results of a bias audit” (FAQ II.2). DCWP sends claims of discrimination to the NYC Commission on Human Rights (FAQ VII.2). See The effect of the results.

What are the penalties for violating Local Law 144?

A person that violates NYC Local Law 144 or its rules is liable for a civil penalty (§ 20-872(a)). The maximum is $500 for a first violation and each additional violation that day, then $500–$1,500 for each subsequent violation.

Other conditions apply:

• Each day of AEDT use in violation and each notice not given in violation is a separate violation (§ 20-872(b)–(c)).
• If the employer or employment agency does not disclose because disclosure violates law or interferes with a law enforcement investigation, that is not a violation (§ 20-871(b)(3)). But it must give the explanation of 6 RCNY § 5-304(d)(3) (disclosure exception).
• The proposed rule for § 6-81 gives first, subsequent, and default penalties, and a separate violation for each charged provision. Its rule for a subsequent violation applies to the same respondent and provision, not more than two years after the previous violation, “unless otherwise specified by law”. The definition applies to “pleading guilty”, “being found guilty in a decision”, or “entering into a settlement agreement”. The proposed rule was for the June 6, 2022 public hearing, and the adopted § 6-81 text is not in the sources.

See Enforcement and penalties for the penalties and conditions of the proposed rule.

How does Modulos model Local Law 144?

Modulos gives NYC Local Law 144 as one AI System Framework, MFF-27, with no Framework at Organization level. Use one AI System for each AEDT. The Framework has one Requirement for the AEDT determination and one for each group of obligations. See The Requirements and One AI System for each AEDT.