Does Local Law 144 Apply to Your Company?

The Core Question: Do You Use an AEDT?

Local Law 144 applies to any employer or employment agency that uses an automated employment decision tool (AEDT) in hiring or promotion for positions based in New York City. The scope determination comes down to two questions: (1) does the tool qualify as an AEDT under the law's definition, and (2) is the tool being used for NYC-based positions?

Under DCWP's final rules, an AEDT is any computational process derived from machine learning, statistical modeling, data analytics, or artificial intelligence that issues a simplified output — a score, classification, or recommendation — and that output is used to substantially assist or replace discretionary decision-making for employment decisions.

The critical phrase is "substantially assists or replaces." DCWP defined three scenarios where a tool meets this threshold: the employer relies exclusively on the tool's output, the employer weighs the tool's output more heavily than any other single criterion in the decision, or the employer uses the tool's output to overrule a human decision-maker who had reached a different conclusion. If none of these apply — for example, if the tool provides one signal among many with no special weight — it may not qualify as an AEDT.

Common Tools That Typically Qualify

AI resume screening software. Tools that automatically filter, score, or rank job applications based on resume content, keywords, or candidate profiles. If the tool's output determines which candidates advance to the next stage, it almost certainly qualifies. Major ATS platforms with built-in AI ranking features fall into this category.

Automated video interview analysis. Platforms that analyze recorded video interviews using AI — evaluating facial expressions, voice patterns, word choice, or other behavioral signals — and produce candidate scores or recommendations. If hiring managers use these scores to decide who advances, the tool qualifies.

Candidate scoring and ranking algorithms. Any algorithmic system that takes candidate data and produces a numerical score, tier classification, or ranked list that hiring managers use to prioritize candidates. This includes AI-powered "match scores" offered by many hiring platforms.

Promotion decision AI. Tools used to evaluate current employees for internal promotion — scoring performance data, peer feedback, or other metrics through algorithmic analysis. LL144 covers promotion decisions, not only external hiring.

Chatbot-based assessments. AI chatbots that ask candidates screening questions and use the responses to generate a qualification score or pass/fail determination. If the chatbot's output determines whether a candidate moves forward, it qualifies.

Common Tools That May Not Qualify

Basic keyword search in an ATS. A recruiter manually searching an applicant tracking system for keywords is not an AEDT — there is no automated scoring or ranking. However, if the ATS has an AI feature that automatically surfaces "best match" candidates, that feature may qualify even if the underlying ATS does not.

Calendar scheduling tools. Automated interview scheduling platforms that simply coordinate availability do not make employment decisions and do not qualify.

Background check services. Standard background check providers that report factual information (criminal records, employment verification) without generating scores or recommendations are not AEDTs. However, if a background check platform uses AI to assess risk and produces a recommendation, that component may qualify.

Tools where the output has minimal influence. If your hiring process uses an AI tool but the output is one of many factors and the hiring manager gives it no special weight — treating it the same as any other data point — the tool may not meet the "substantially assists" threshold. This is a fact-specific determination and should be documented.

Geographic Scope: Remote Hiring and Out-of-State Employers

LL144 applies based on where the job is performed, not where the employer is headquartered. This creates two important scope implications.

Out-of-state employers hiring for NYC positions. If your company is based in California, Texas, or anywhere outside New York, but you are hiring for positions that will be performed in New York City — including hybrid roles where the employee works from a NYC office — LL144 applies to you. Your company's location is irrelevant; what matters is where the job is based.

Remote roles associated with a NYC office. This is where scope gets nuanced. If you are hiring for a fully remote position but the role is associated with a NYC office — meaning the position reports to a NYC-based team, is listed under a NYC location in your org chart, or the employee would be assigned to your NYC entity — LL144 likely applies. A fully remote role with no NYC connection is less clear, and DCWP has not published definitive guidance on every scenario.

Employment agencies operating in NYC. Staffing firms, recruiting agencies, and temp agencies that place candidates in NYC positions are covered regardless of where the agency itself is located. Both the agency and the end employer may have separate compliance obligations.

Vendor vs. Employer Responsibility

A common misconception: "Our AI vendor handles compliance." This is incorrect. Under LL144, the employer or employment agency using the AEDT is responsible for compliance — not the software vendor that built the tool. The vendor may assist with the audit (if they are not the auditor — which they cannot be if they have a financial interest), but the legal obligation to conduct the audit, publish results, and notify candidates falls on the employer.

If your vendor claims their tool "comes with LL144 compliance," scrutinize this carefully. A vendor-provided bias audit may not satisfy the independence requirement if the vendor has a financial interest in the tool's continued use. The employer must independently verify that the auditor meets LL144's independence standard.

What If You Are Not Sure?

If you are uncertain whether your tools qualify as AEDTs or whether your hiring process triggers LL144 obligations, the safest approach is to conduct a formal scope assessment. Document your analysis — which tools you use, how their outputs are weighted in hiring decisions, and whether positions are NYC-based — and keep this on file. A documented good-faith scope assessment, even if it concludes that LL144 does not apply, demonstrates compliance effort and creates an audit trail.

Lexara Advisory provides formal AEDT scope assessments as the first step of every engagement. If your tool does not qualify, we document why. If it does, we proceed directly to the bias audit process.

Lexara Advisory LLC — AI governance consulting, not legal practice. This article provides general compliance information only and does not constitute legal advice.