Frequently Asked Questions on NYC Local Law 144

Many HR leaders we speak to say something similar, and are correct. However, the New York law applies not only to AI or Machine Learning tools but to any automated tool that qualifies.

Further, the law applies to hiring processes that use an automated tool at any point of the hiring funnel; it does not have to be the case that an automated tool is making the final hiring decision.

Please contact us to schedule a free consultation to go over your NYC local law 144-specific use cases. As a very general rule, when a tool is screening some candidates out of hiring contention, or when a tool produces an “objective” score or rank-orders candidates, the tool may require an audit. The most common use cases that end up requiring audit are:

• Resume screening conducted by ATS
• Assessments that provide a score or pass/fail metric
• Interview tools that produce scores or otherwise rank candidates

Yes! Every jurisdiction is likely to regulate these tools differently, but there will definitely be regulation. We expect regulation to go into effect in California, Colorado, and likely Washington DC.

Most importantly, the EEOC has designated bias in automated systems as one of its top 3 focus areas for rule-making in 2023 and is actively working through its regulatory process now.

Penalties have been set at up to $1,500 per day. Each tool that falls under the law that is not audited is a separate violation. So, a company that uses 3 automated tools, starting on the third day after violation, will incur a penalty of $4,500 per day indefinitely until they comply.

Local Law 144 applies to companies that have offices and employees in NYC. Companies that have offices and hire remotely may or may not need to comply based on the details of the employment situation. (We are happy to talk this through!)