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Scope and applicability ​

Local Law 144 applies only if an employer or employment agency uses an automated employment decision tool (AEDT) in the city for an employment decision. All other obligations of the law follow from this determination.

N.Y.C. Administrative Code § 20-870 gives the definitions of an AEDT and of an employment decision. The DCWP is the New York City Department of Consumer and Worker Protection. The DCWP rules in 6 RCNY § 5-300 give definitions for the parts of the AEDT definition.

The DCWP FAQ (Frequently Asked Questions) of June 29, 2023 gives information about the location and about the steps of the hiring or promotion process. In the FAQ, DCWP gives "general information and guidance", and the FAQ is not law.

In Modulos, the Requirement MRF-476 is for this determination (Operationalizing NYC Local Law 144 in Modulos).

The statutory definition — § 20-870 ​

For an employer or employment agency, Local Law 144 starts with this definition of an AEDT in § 20-870:

The term “automated employment decision tool” means any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons. The term “automated employment decision tool” does not include a tool that does not automate, support, substantially assist or replace discretionary decision-making processes and that does not materially impact natural persons, including, but not limited to, a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data.

Section 20-870 also gives the definition of an employment decision:

The term “employment decision” means to screen candidates for employment or employees for promotion within the city.

Thus, a tool is an AEDT only if all of these conditions apply:

  • The tool is a computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence.
  • The tool gives simplified output, for example a score, classification, or recommendation.
  • The simplified output is used to substantially assist or replace discretionary decision making for employment decisions that impact natural persons.

The DCWP rules give definitions for some parts of each of these three conditions (next section). The rules do not change the other parts of § 20-870.

Section 20-870 also excludes a tool from the definition if the two conditions that follow apply together:

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

Section 20-870 gives examples of such tools: a junk email filter, firewall, antivirus software, calculator, spreadsheet, database, data set, or other compilation of data. These are only examples ("including, but not limited to").

The rules' tests — 6 RCNY § 5-300 ​

DCWP gives these definitions for the parts of the § 20-870 definition in 6 RCNY § 5-300:

ItemDefinition in 6 RCNY § 5-300
Simplified outputA prediction or classification "as specified in" the definition of "machine learning, statistical modeling, data analytics, or artificial intelligence" (next row). A simplified output can be a score, a tag or categorization, a recommendation, or a ranking. It is not "the output from analytical tools that translate or transcribe existing text, e.g., convert a resume from a PDF or transcribe a video or audio interview".
"Machine learning, statistical modeling, data analytics, or artificial intelligence"A group of mathematical, computer-based techniques to which the two parts that follow apply. Part 1: "that generate a prediction, meaning an expected outcome for an observation, such as an assessment of a candidate’s fit or likelihood of success, or that generate a classification, meaning an assignment of an observation to a group, such as categorizations based on skill sets or aptitude". Part 2: "for which a computer at least in part identifies the inputs, the relative importance placed on those inputs, and, if applicable, other parameters for the models in order to improve the accuracy of the prediction or classification".
"To substantially assist or replace discretionary decision making"One of these three uses of a simplified output. Use 1: "to rely solely on a simplified output (score, tag, classification, ranking, etc.), with no other factors considered". Use 2: "to use a simplified output as one of a set of criteria where the simplified output is weighted more than any other criterion in the set". Use 3: "to use a simplified output to overrule conclusions derived from other factors including human decision-making".
Screen"to make a determination about whether a candidate for employment or employee being considered for promotion should be selected or advanced in the hiring or promotion process"
Candidate for employment"a person who has applied for a specific employment position by submitting the necessary information or items in the format required by the employer or employment agency"

With the definitions of the rules, a tool is an AEDT only if all of the conditions that follow apply:

  • The two parts of the definition of "machine learning, statistical modeling, data analytics, or artificial intelligence" apply to the tool.
  • The tool gives a simplified output.
  • The employer or employment agency uses that simplified output in one of the three uses, for employment decisions that impact natural persons.

The test for "to substantially assist or replace discretionary decision making" examines how the employer or employment agency uses the simplified output. If the use is one of the three uses, this condition applies. If the use is none of the three uses, this condition does not apply.

If the exclusion in § 20-870 does not apply to a tool, this fact does not make the tool an AEDT. The tool is an AEDT only if all of the conditions above also apply.

Screening, persons, and location — DCWP FAQ ​

The DCWP FAQ gives information to employers and employment agencies about the scope of Local Law 144. The FAQ is not law. It gives these three items:

  • Screening (FAQ I.5). An employment decision is not "just the final hiring or promotion decision". The FAQ tells employers and employment agencies that the law "defines employment decision more broadly to include screening". It also tells them that if an employer or employment agency uses an AEDT "to substantially help them assess or screen candidates at any point in the hiring or promotion process", it "must comply with the Law’s requirements before using an AEDT".

  • Persons that the AEDT assesses (FAQ I.6). The FAQ tells employers and employment agencies that the requirements do not apply if an employer or employment agency uses an AEDT "to scan a resume bank, conduct outreach to potential candidates, or invite applications". They apply to AEDT use "to assess candidates for hiring or promotion only". The FAQ also gives this text: "If AEDT use is to assess someone who is not an employee being considered for promotion and who has not applied for a specific position for employment, the bias audit and notice requirements do not apply."

  • "Used in the city" (FAQ I.4). The obligations of § 20-871(a) and (b) apply to AEDT use "in the city". The statute and the rules do not give a definition of "in the city". The FAQ gives this text: "The Law applies only to employers and employment agencies that use an AEDT “in the city.”" The FAQ gives these conditions for use in the city:

    1. "The job location is an office in NYC, at least part time."
    2. "The job is fully remote but the location associated with it is an office in NYC."
    3. "The location of the employment agency using the AEDT is NYC or, if the location of the employment agency is outside NYC, one of the bullets above is true."

    One condition is sufficient. Condition 3 applies to employment agencies only.

Promotion is in scope because of the law, not because of the FAQ. Section 20-870 includes employees for promotion in the definition of an employment decision. The definition of "screen" in 6 RCNY § 5-300 also includes an employee being considered for promotion. A tool for internal promotion is an AEDT only if all the conditions of the definition apply to it. If it is an AEDT, the notice obligation of § 20-871(b) applies to an employee who is screened with it for promotion and who resides in the city. To give this employee the notice of § 20-871(b)(1) and (2), the employer or employment agency is permitted to use one or more of the three methods in 6 RCNY § 5-304(c) (Publication and notices).

The scope of the law and the persons that the employer or employment agency must notify are two different items. The law applies to use "in the city" (the "Used in the city" item above), but the notice of § 20-871(b) is only for persons who reside in the city (Candidate and employee notice).

Who is responsible ​

Local Law 144 applies to the employer or employment agency that uses the AEDT. Section 20-871(a) applies to "an employer or an employment agency" that uses an AEDT. Section 20-871(b) applies to "any employer or employment agency that uses" an AEDT. The statute gives no obligation to a vendor.

The DCWP FAQ, which is not law, agrees. FAQ V.1 tells employers and employment agencies that they "are responsible for ensuring they do not use an AEDT unless a bias audit was done". It also gives this text: "The vendor that created the AEDT is not responsible for a bias audit of the tool."

A vendor that is also the employer or employment agency that uses the AEDT has the obligations of an employer or employment agency.

A vendor can have an independent auditor do a bias audit of its tool (FAQ V.2). An employer or employment agency "may rely on a bias audit of an AEDT that uses the historical data of other employers or employment agencies" only if one of the two conditions of 6 RCNY § 5-302(a) applies (The bias audit and its data).

Penalties — § 20-872 and 6 RCNY § 6-81 ​

Section 20-872(a) makes "any person that violates any provision of this subchapter or any rule promulgated pursuant to this subchapter" liable for a civil penalty. The enforcement and penalties section of the NYC Local Law 144 page gives the penalties and how the law counts violations. It also gives the 6 RCNY § 6-81 schedule from the "proposed rule" of the DCWP notice for the "public hearing" on June 6, 2022. The same section gives the effect of § 20-874 on a civil action and on the Commission on Human Rights.

How this maps in Modulos ​

Modulos uses the MFF-27 Requirement MRF-476 (AEDT applicability determination) for this determination. For the provisions of the law and the rules in MRF-476, see The Requirements.

Sections 20-870 to 20-874 and 6 RCNY §§ 5-300 to 5-304 contain no obligation to record the determination or to examine it again. The obligations of § 20-871 apply to the use of an AEDT in the city, with or without a record of the determination.

For the steps that Modulos recommends for this determination, see Steps that Modulos recommends. Two items of step 1 are not obligations of the law: the record of the determination, and a new determination after a change.

Where to go next ​

Disclaimer

This page gives general information only. It is not legal advice. Always compare this page with the text of N.Y.C. Administrative Code §§ 20-870–874, 6 RCNY §§ 5-300–5-304, and 6 RCNY § 6-81 that is in effect. Get legal advice from a lawyer.