How NYC Is Regulating AI Use In Hiring

Author Optimiste AI Team

What is NYC Local Law 144?

At its core, Local Law 144 is about fairness and transparency in hiring.

It targets the use of Automated Employment Decision Tools (AEDTs). This is any piece of software or an automated system that uses AI or statistical modelling to substantially help employers make hiring or promotion decisions.

Think of tools that automatically screen CVs, analyse video interviews for personality traits, or rank candidates based on test scores.

The law mandates three key actions for any employer using such a tool for a role based in New York City:

Most importantly, if you use AI to help you hire in NYC, you must get it checked for bias, tell the world the results, and tell your candidates you're using it.

Why This Law is So Critical for Your Organisation

It's easy to dismiss this as just another piece of local compliance, but that would be a significant mistake. Here’s why this law is so important:

Reputational Risk is High: In an era where corporate ethics and diversity are under intense scrutiny, failing a bias audit—or failing to conduct one—can cause serious damage to your brand. It signals that you may not be committed to fair hiring practices, making it harder to attract top talent.

Significant Financial Penalties: Non-compliance comes with hefty fines, which can accrue daily for each violation. These financial penalties can quickly add up, turning an efficiency tool into a major liability.

It Reaches Beyond the US: If you are a UK-based organisation hiring for roles located in New York City, this law applies to you. The digital nature of modern recruitment means geographical boundaries are no longer a shield from regulatory responsibility.

How Your Business Must Prepare: A Practical Checklist

1. Map Your AI Landscape: The first step is to conduct an internal audit. Do you know every tool your HR and recruitment teams are using? Identify every piece of software involved in your hiring and promotion pipeline, from sourcing and screening to interviews and assessments. Determine which of these qualify as an AEDT.

2. Engage With Your Vendors: The responsibility for compliance rests with you, the employer, not the software vendor. Contact your HR tech providers immediately. Ask them:

• Are you aware of Local Law 144?

• Have you facilitated independent bias audits for your tool?

• Can you provide us with the necessary data and support to conduct our own audit?

If your vendor is unprepared, you need to consider the risk of continuing to use their tool.

3. Source an Independent Auditor: You cannot audit yourself. You need to find a qualified, independent third party with expertise in data science, fairness metrics, and employment law. This is a new specialism, so start your search early.

4. Update Your Processes and Policies:

• Transparency: Designate a clear, accessible place on your careers website to publish the audit summaries.

• Notification: Create standardised language to include in job applications and communications, informing candidates about your use of an AEDT and their rights.

• Alternatives: Establish a clear process for candidates who request an alternative screening method.

  
  

5. Think Bigger Than NYC: Use this law as a catalyst to build a comprehensive AI governance framework for your entire organisation. This isn't just about ticking a box for one city; it's about embedding ethical AI principles into your company's DNA.

To see how Optimiste AI can help you ensure compliance, schedule a demo today.