The short answer
An automated employment decision tool (AEDT) is, under New York City's Local Law 144, "any computational process, derived from machine learning, statistical modeling, data analytics, or artificial intelligence, that issues simplified output, including a score, classification, or recommendation, that is used to substantially assist or replace discretionary decision making for making employment decisions that impact natural persons." It matters because an employer or employment agency may not use an AEDT to screen candidates in the city unless the tool had a bias audit within the past year, the results are posted, and candidates get notice.
The AEDT definition explained
The city's FAQ boils the definition down to three tests, and a tool must meet all three. It uses machine learning, statistical modeling, data analytics or AI. It helps employers or employment agencies make employment decisions. And it substantially assists or replaces discretionary decision-making.
The output has to be "simplified." The rules give examples: a score (rating a candidate's estimated technical skills), a tag or category (sorting resumes by keywords), a recommendation (whether to interview someone) or a ranking (ordering candidates by how well their cover letters match the job). Tools that only translate or transcribe, such as converting a resume from a PDF or transcribing an interview, do not produce simplified output.
The phrase "substantially assist or replace" has a precise meaning in the city's rules. It is met in any of three ways:
The law also excludes tools that do not automate, support, substantially assist or replace discretionary decisions and do not materially impact people, naming a junk email filter, firewall, antivirus software, calculator, spreadsheet, database and data set as examples.
What employers must do
An "employment decision" means screening candidates for employment or employees for promotion within the city, and the FAQ says that covers screening at any point, not only the final decision. It does not cover scanning a resume bank or outreach to people who have not applied. If the law applies, the employer or employment agency must:
- Use the tool only if its most recent bias audit was conducted no more than one year earlier.
- Post a summary of the audit results and the tool's distribution date on the employment section of its website before use.
- Give candidates who live in the city notice at least 10 business days before use, including how to request an alternative process or an accommodation.
Penalties run up to $500 for a first violation and $500 to $1,500 for each later one, and each day of noncompliant use is a separate violation. DCWP began enforcing on July 5, 2023. Our Local Law 144 guide walks through notices and posting step by step.
Related terms
- Bias audit: the independent evaluation an AEDT needs every year in NYC.
- Impact ratio: each group's rate divided by the top group's rate.
- Selection rate: the share of a group that a tool moves forward.
- Adverse impact: a substantially different selection rate that disadvantages a group.
- AI resume scoring: a common type of tool that can fall under the AEDT definition.
Questions
Is every AI hiring tool an AEDT?
No. It must use machine learning, statistical modeling, data analytics or AI, produce a simplified output such as a score or ranking, and substantially assist or replace the decision under one of the three tests in the city's rules. A transcription tool or a scheduling calendar is not an AEDT on its own.
Does Local Law 144 apply to remote jobs?
It can. The city's FAQ says the law applies when the job is located at an office in New York City at least part time, when a fully remote job is associated with a city office, or when the employment agency using the tool is located in the city.
Must an employer stop using an AEDT if the audit shows a disparity?
Local Law 144 requires the audit but does not require any specific action based on its results. The city's FAQ points out that federal, state and city anti-discrimination laws still apply, so a low impact ratio is a reason to review the tool with counsel.
Want to see how an interview tool with a published Local Law 144 audit handles notices and scoring? Book a 20-minute demo, or take a sample interview first.
This is not legal advice.
