New York City Proposes New Rules to Clarify Law on Employers’ Use of Artificial Intelligence

October 04, 2022

The New York City Department of Consumer and Worker Protection recently published proposed rules providing guidance on the artificial intelligence law enacted in December 2021 that prohibits employers from using automated employment selection tools unless specific bias audit and notice requirements are met.


Emerging artificial intelligence (AI) technologies hold the promise of streamlining employment and hiring processes across all industries.

Historically, the courts and regulatory enforcement agencies have analyzed these tools under local, state, and federal anti-discrimination laws and treated them the same as other employment selection procedures used in hiring. However, in December 2021, the New York City Council enacted Local Law 144 (the AI Law), which prohibits employers from using automated employment selection tools unless specific bias audit and notice requirements are met.

Effective January 1, 2023, it will be unlawful for an employer or employment agency to use an automated employment decision tool (AEDT) to screen a candidate or employee unless: (1) the tool has undergone a bias audit no more than one year prior to its use, (2) a summary of the most recent bias audit is made publicly available, and (3) notice of use of the AEDT and an opportunity to request an alternative selection process is provided to each employee or candidate who resides in New York City. In doing so, New York City joined Illinois, Maryland, and several other jurisdictions in efforts to regulate AI in the workplace to decrease hiring and promotion bias.

Now, New York City has finally issued proposed rules providing more guidance on the AI Law before it takes effect.


On September 23, 2022, the New York City Department of Consumer and Worker Protection (DCWP) published proposed rules related to the implementation of the AI Law (the Proposed Rules). The Proposed Rules provide additional clarity on the AI Law’s requirements and answer some key employer questions.

For instance, the Proposed Rules seem to clarify that an employer can use a bias audit commissioned by a vendor and based on historic vendor data to meet the AI Law’s requirements. Employers are apparently not obligated to commission their own independent review of a tool’s impact on their particular applicant pool. However, the Proposed Rules do not account for a scenario where the vendor is also the developer, which is the case with many AEDT companies.

The Proposed Rules also define the term “independent auditor” to mean any “person or group that is not involved in using or developing an AEDT.” This broad definition seems to allow employers to partner with a range of entities to conduct an audit, including those it may use for other evaluations or services.

Additionally, the Proposed Rules do the following:

  • Clarify that the AI Law applies only when AEDT simplified output (such as a score, tag, classification, or ranking) is (1) the sole criteria relied upon, without considering other factors, (2) given more weight than any other criteria, or (3) used to overrule or modify conclusions derived from other factors, such as human decisionmaking.
  • Set forth minimum required elements for a bias audit, including (1) calculation of the selection rate for each race/ethnicity and a sex category; and (2) comparison of such “selection rates” to the most selected category to determine an “impact ratio” using a defined formula.
  • Confirm that the prospective notice requirement to candidates and employees residing in New York City regarding the use of AEDTs can be met by clear and conspicuous writing on the employer website, job posting, or via US mail or email at least 10 business days prior to the use of the AEDT.
  • Confirm that employers can meet the requirement to publish the distribution date of the AEDT, the date of the most recent bias audit and a summary of the results if they include a clear and conspicuous link to a website containing this information on the careers or job sections of their website. Employers must keep the summary of results and distribution date posted for at least six months after last using the audit tool.
  • Define the following key terms that were not defined in the statute:
    • “Screen” means “to make a determination about whether someone should be selected or advanced in the hiring or promotion process.”
    • “Selection rate” means “the rate at which individuals in a category are either selected to move forward in the hiring process or assigned a classification by an AEDT. Such rate may be calculated by dividing the number of individuals in the category moving forward or assigned a classification by the total number of individuals in the category who applied for a position or were considered for promotion.”
    • “Impact ratio” means “either (i) the selection rate for a category divided by the “selection rate of the most selected category or (ii) the average score of all individuals in a category divided by the average score of individuals in the highest scoring category.”

However, the Proposed Rules do not address other vital compliance issues, such as the precise requirements of an alternative selection process or accommodation that must be offered to employees who opt-out of an AEDT. The Proposed Rules only state that the notice must include instructions on how to seek the alternative process or an accommodation.

The Proposed Rules also do not clarify whether the AI Law requires that employers update bias audits annually or if one audit conducted prior to the initial use of the tool is sufficient, provided the tool does not change. Employers will hope for further guidance from the city on these issues prior to the effective date of the AI Law.


The DCWP will hold a public hearing on the Proposed Rules on October 24 at 11:00 am. Prior to the hearing, any individual or group may submit comments on the Proposed Rules. Written comments can be submitted in advance by email to or online, where there is also a link to join the public hearing by videoconference or phone. Comments can also be raised at the public hearing, but those wishing to speak at the hearing will be allotted three minutes of speaking time and must sign up in advance by calling (212) 436-0396.


Now that New York City has issued these Proposed Rules, employers should consider taking various steps to evaluate their use of AI employment tools, including the following:

  • Review existing use of AEDTs in their hiring and promotion practices to determine whether they are covered by the AI Law.
  • Review data retention policies applicable to data collected through the use of AEDTs.
  • Train supervisors and managers, as well as compliance, human resources, and legal professionals on the implications of the new law, including notice requirements and proper responses to employee communications.
  • Communicate with any vendors who operate AEDTs for the business to confirm they are in compliance with the AI Law.
  • Determine how the company will meet the independent audit and notice requirements of the AI Law and any final rules.
  • Continue to monitor for any changes to the Proposed Rules after the October 24 hearing date and DCWP responses to public comments.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following:

Washington, DC