NYC has passed a law regarding the use of artificial intelligence in hiring and it is being enforced as of July 5, 2023. The law, Local Law 144 (AI Bias Law), prohibits employers from using artificial intelligence (AI) technology to make hiring or promotional decisions unless certain requirements are met.

Three threshold questions will determine whether the AI Bias Law applies:

1.    Does the employer use “automated employment decision tools” (AEDTs)?

2.    Does the AEDT make “covered employment decisions?”

3.    Are the decisions made “in” New York City?

First, employers should be aware that the statute defines AEDTs very broadly. These include (i) any computational process, derived from “machine learning, statistical modeling, data analytics, or artificial intelligence” (ii) that “issue simplified output” (iii) to help employers make otherwise discretionary hiring or employment decisions.

Notably, this definition encompasses less sophisticated computer-based tools not typically considered AI. In addition, determining whether an employer is using the AI tool in a way that brings it within the definition of an AEDT is a complex and fact-intensive process.

Regarding the second question, the statute defines “employment decisions” as decisions related to hiring or promotion. It does not cover, for example, decisions regarding compensation or termination. The law applies to the screening process for applicants and employees, not only to final hiring or promotion decisions.

Third, the law applies to employers and agencies “in the city.” This covers applicants and employees: (i) whose job location is in New York City, even part time; and (ii) who work or will work remotely, but who report to a worksite in New York City.

If an employer meets the three criteria above, the AI Bias Law applies, and the employer must take four steps:



(1) conduct an annual independent bias audit,

(2) publish the audit’s results,

(3) notify applicants and employees of the tool’s use, and

(4) provide notice that individuals subject to the tool may request an

accommodation or alternative selection process.

Employers and employment agencies who violate the AI Bias Law, either by using non-compliant AEDTs or by failing to provide proper notice, will be subject to civil penalties and lawsuits-- the law provides aggrieved candidates a private right of action.

Employers should review and assess all computer-based tools used in making decisions related to hiring and promotions to ensure that they are not unknowingly violating the law. The Department of Consumer and Worker Protection has released a Frequently Asked Questions page, that can be found here: https://www.nyc.gov/assets/dca/downloads/pdf/about/DCWP-AEDT-FAQ.pdf.

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If you have questions or would like additional information, please contact our Labor & Employment attorneys or the primary EGS attorney with whom you work.