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NYC Local Law 144 Is In Effect — Now What?

After being pushed back twice, New York City’s AI anti-bias law for hiring is now in effect. What has felt very theoretical is now reality — tens of thousands of businesses with offices in NYC will now be subject to annual bias auditing, or face fines of up to $3,000 per day.

The obvious next phase is simply that companies will need to start complying for the new law via independent audit of their automated hiring systems. But what else should employers be thinking about as we all look forward?

Be Prepared For the Law To Change

We received a substantial update to the regulations in the form of an updated FAQ from NYC Department of Consumer and Workforce Protection at 4:01pm ET on Friday, June 30. Then we had a weekend, then the July 4 holiday, and then the law was in effect — meaning that employers, legal counsel, and us as indepe3ndent auditors got essentially one business hour to implement new rules!

Clearly, this is a law that has been changing quickly, and we should expect it to continue to do so. It will be particularly instructive for employers to watch to see whether future changes require audits currently in effect to be updated.

We will also likely see changes to the groups protected under the law. One clear example: The current law requires audits of gender, but only two gender choices are given (female/male). Given that this is a NYC law, I would expect more gender choices to be required of audits in the future.

Enforcement Is Very Unclear

The enforcement mechanism for Local Law 144 has never been particularly clear. We at Proceptual have asked DCWP twice to shed some light on the enforcement plan, and they have twice declined to do so (very politely).

One hint came in the FAQ update referenced above. The last page references a mechanism for the public to file complaints against employers for noncompliance with the law. We have long said that we can expect plaintiffs lawyers, civil society groups, and motivated individuals to report companies in bulk who do not conform to the new law; this is now more likely to play out as DCWP encourages reporting.

Expect More Copycat Laws In Other Jurisdictions

The issue of algorithmic hiring bias has become even more popular since NYC passed its law a long 2 years ago. Legislation with similar-but-different particulars has been proposed in California, New Jersey, DC, Connecticut, and others. Further, EEOC has reinforced the applicability of existing federal law to next-generation hiring tools; they have also recommended independent audit as one solution.

Proceptual provides compliance solutions for emerging regulation of automated and AI-powered hiring systems, including independent audits for NYC Local Law 144.

John Rood

John is a sought-after expert on emerging compliance issues related to AI in hiring and HR. He has spoken at the national SHRM conference, and his writing has appeared in HR Brew, Tech Target, and other publications. Prior to Proceptual, John was founder at Next Step Test Preparation, which became a leader in the pre-medical test preparation industry before selling to private equity. He lives in the Chicago area and is a graduate of Michigan State University and the University of Chicago.