New York City regulates AI in hiring through Local Law 144 of 2021, enforced by the Department of Consumer and Worker Protection since July 5, 2023. Before using an automated employment decision tool to screen a candidate or employee, an employer or employment agency must have had the tool independently bias-audited within the past year, publish a summary of the results, and notify New York City candidates and employees at least 10 business days in advance. Penalties are up to $500 for a first violation and $500–$1,500 for each later violation, with each day of use a separate violation. For a bank the law applies to HR and recruiting tools for New York City roles, not to credit or customer-facing AI. In December 2025 the New York State Comptroller found DCWP's system for enforcing the law ineffective.
| Full name | New York City — Department of Consumer and Worker Protection (enforces Local Law 144 of 2021 on automated employment decision tools), with the NYC Law Department, which may sue to compel compliance, and the NYC Commission on Human Rights |
| Role | Municipal consumer and worker protection agency enforcing a bias-audit and notice law for AI hiring tools |
| Force on banks | Binding law |
| Applies to | Employers and employment agencies, including banks, that use an automated employment decision tool to screen candidates or employees for employment decisions in New York City. Under DCWP's rule a tool is covered when its simplified output (score, tag, classification, ranking or recommendation) is the sole factor, is weighted more than any other criterion, or is used to overrule other conclusions. The law does not govern lending, fraud or customer-service AI; for banks it is an HR and recruiting rule |
| Key document | Local Law 144 of 2021 (NYC Administrative Code §§ 20-870 to 20-874) and DCWP's final rule (6 RCNY §§ 5-300 to 5-304); enforcement began July 5, 2023 |
| Latest move | The New York State Comptroller issued Report 2024-N-6 on December 2, 2025, finding DCWP's system for enforcing Local Law 144 ineffective and recommending enforcement that does not rely only on complaints |
| Documents tracked | 1 · all documents → |
DCWP's final rule (6 RCNY Chapter 5, Subchapter T, §§ 5-300 to 5-304) narrowed and operationalized the statute. A tool substantially assists or replaces discretionary decisions only if it is the sole basis, is weighted more than any other criterion, or overrides other conclusions. A bias audit must calculate selection rates or scoring rates and impact ratios for sex, race/ethnicity and intersectional categories, report the number of individuals in unknown categories, and may exclude a category under 2% of the data. The auditor must be independent, which excludes anyone who used, developed or distributed the tool or has an employment or financial relationship with the employer or vendor. Results must be posted before use and kept posted for at least six months after the tool's last use. DCWP first proposed rules on September 23, 2022, proposed a second version on December 23, 2022, and published the final rule on April 6, 2023; enforcement began July 5, 2023.
Enforcement has been weak. The State Comptroller's audit of July 2023 to June 2025 (Report 2024-N-6, issued December 2, 2025) found that DCWP's complaint process did not ensure complaints reached it, that DCWP received only two AEDT complaints in the period, and that DCWP's review of 32 companies found one instance of non-compliance where the auditors found at least 17; DCWP generally agreed with the recommendations while disputing parts of the findings. The law preserves candidates' and employees' right to sue and the Commission on Human Rights' authority (§ 20-874), so a bank's exposure to HR-tool bias claims does not depend on DCWP's enforcement pace. The notice duties run to candidates and employees who reside in the city.
What has the NYC DCWP actually published on AI?
| Date | Document | Status |
|---|---|---|
| Dec 11, 2021 | NYC Local Law 144 (AEDT) — A Local Law to amend the administrative code of the city of New York, in relation to automated employment decision tools (Local Law 144 of 2021) and DCWP final rule | In force |
| Date | Type | Document / event |
|---|---|---|
| Dec 2, 2025 | Milestone | State Comptroller audit finds DCWP enforcement of Local Law 144 ineffective. Report 2024-N-6 of the Office of the New York State Comptroller, covering July 2023 to June 2025, found DCWP's complaint intake did not ensure complaints reached the agency, that DCWP did not use the formal review procedures created with the NYC Office of Technology and Innovation, and that its review of 32 companies found one issue where the auditors found at least 17 potential violations. DCWP generally agreed with the recommendations. |
| Apr 6, 2023 | Milestone | DCWP publishes the final rule implementing Local Law 144. After two rounds of proposed rules and public hearings on November 4, 2022 and January 23, 2023, DCWP published its final rule, which added Subchapter T to Chapter 5 of Title 6 of the Rules of the City of New York. The rule is listed as effective July 5, 2023, the date DCWP began enforcement. |
| Dec 11, 2021 | Statute | NYC Local Law 144 (AEDT) — A Local Law to amend the administrative code of the city of New York, in relation to automated employment decision tools (Local Law 144 of 2021) and DCWP final rule. NYC Local Law 144 of 2021, which the City Council passed in November 2021 and which became law without the mayor's signature in December 2021, prohibits employers and employment agencies from using an automated employment decision tool to screen candidates or employees in New York City unless the tool was bias-audited by an independent auditor within the past year, a summary of the audit is published on the employer's website, and candidates and employees who reside in the city were notified at least 10 business days before use. source ↗ |
- Whether DCWP builds proactive investigations and fixes complaint routing from 311, as the Comptroller recommended
- Any amendment of Local Law 144 by the City Council or revision of DCWP's final rule, for example on the definition of automated employment decision tool or on audit content
- The first published DCWP penalties or Law Department actions under Sections 20-872 and 20-873, and whether any involve a financial institution
- How New York State or federal law interacts with the city rule if a statewide AI hiring law is enacted
Does NYC Local Law 144 apply to banks?
Yes, when a bank is an employer or employment agency that uses an automated employment decision tool to screen candidates or employees for jobs or promotions in New York City. It does not apply to AI used for lending, fraud detection or customer service.
When did NYC Local Law 144 take effect and when did enforcement start?
The law was enacted in December 2021 and by its text took effect on January 1, 2023, but DCWP postponed enforcement and began enforcing the law and its rule on July 5, 2023.
What are the penalties under NYC Local Law 144?
Up to $500 for a first violation and for each additional violation on the same day, and $500 to $1,500 for each subsequent violation (Administrative Code § 20-872). Each day an unaudited tool is used is a separate violation, and each missing notice is a separate violation.
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