New York Employment Law and AI: What Workers and Employers Need to Know
Artificial intelligence is becoming part of ordinary working life in New York. A company might use AI to sort résumés, screen applicants, evaluate candidates, organize schedules, analyze performance, or help managers make employment decisions. For workers, that can create a strange situation: sometimes a computer system is influencing a career decision without the employee even realizing it.
New York employment law is beginning to address some of these concerns. There isn’t one single “New York AI employment law” covering every use of artificial intelligence. Instead, existing discrimination, wage, privacy, and employment rules can apply to AI-driven decisions, while New York City has specific requirements for certain automated employment decision tools (AEDTs).
How Is AI Being Used in the Workplace?
AI can show up in employment decisions in ways that aren’t always obvious.
For example, an employer might use software to:
- Screen résumés
- Rank job applicants
- Recommend candidates
- Evaluate employees
- Analyze performance
- Schedule workers
- Assess skills
- Identify potential candidates for promotion
- Analyze workplace data
Some systems may look like ordinary HR software even though artificial intelligence or machine-learning technology is operating behind the scenes.
That’s why employees may not always know when an algorithm has played a role in an employment decision.
New York City Has Specific Rules for AI Hiring Tools
One of the most important rules for New York workers is New York City’s Local Law 144, which regulates certain automated employment decision tools.
The law covers tools that use machine learning, statistical modeling, data analytics, or artificial intelligence to substantially assist in employment decisions, including screening candidates or employees for promotion.
If a covered employer or employment agency wants to use an AEDT in New York City, it must meet specific requirements.
What Is an Automated Employment Decision Tool?
An AEDT is essentially a computer-based system that helps make employment decisions.
It could be used to determine which résumés move forward or which employees are considered for promotion.
For example, imagine 2,000 people apply for a position. Instead of having a recruiter personally review every résumé, an automated system ranks applicants and helps determine who gets through to the next stage.
That’s the kind of situation where New York City’s AEDT rules can become relevant.
Employers Must Conduct a Bias Audit
Under New York City’s law, employers and employment agencies generally cannot use a covered AEDT unless the tool has undergone a bias audit within one year before its use. Information about the audit must also be made publicly available.
The purpose is to look for potential discriminatory effects in how the technology operates.
This matters because an AI system can appear neutral while still producing unequal outcomes for certain groups.
An employer cannot simply say, “The computer made the decision, so we’re not responsible.”
The use of technology doesn’t automatically remove an employer’s obligations under employment discrimination laws.
Job Candidates Must Receive Notice
New York City’s AEDT rules also require certain notices to employees and job candidates.
The notice must explain that an automated employment decision tool will be used to assess them. It must also include information about requesting a reasonable accommodation.
For a job applicant, this can be important.
Imagine submitting a résumé and completing an online assessment without knowing that software is evaluating your answers. The required notice gives candidates more information about the hiring process.
Employers Must Provide Information About the Tool
Covered employers and employment agencies also have website disclosure obligations concerning the type and source of data used by the AEDT and the tool’s data-retention policy.
This doesn’t mean a worker gets access to every detail of an employer’s proprietary software.
But the law does require certain information to be made available.
What If an AI System Discriminates?
This is one of the biggest employment-law concerns surrounding AI.
Suppose an automated hiring system consistently rejects qualified applicants from a particular protected group. The fact that an algorithm made the decision doesn’t necessarily make the outcome lawful.
New York already prohibits employment discrimination based on protected characteristics. Depending on the circumstances, those protections can apply even when technology is involved in the decision-making process.
So employers should not assume that using AI creates a legal shield.
AI Does Not Replace Human Responsibility
One common misunderstanding is that an employer can blame the software if something goes wrong.
Imagine a manager says:
“We didn’t reject your application. The AI system did.”
That doesn’t necessarily end the conversation.
Employers remain responsible for complying with applicable employment laws. If an automated system contributes to an unlawful discriminatory decision, the use of AI may become part of the evidence surrounding the employment decision.
For employers, this makes choosing, testing, monitoring, and documenting AI systems particularly important.
What Rights Do Employees Have?
Workers don’t lose their existing employment rights simply because their employer starts using AI.
Employees can still have rights involving:
- Discrimination
- Retaliation
- Pay
- Overtime
- Workplace accommodations
- Leave
- Privacy
- Hiring and promotion
- Workplace harassment
AI can change how an employment decision is made, but it doesn’t automatically change the legal protections surrounding that decision.
What About AI and Disability Accommodations?
This is another important issue.
Some AI-based hiring tools may assess candidates through online tests, video interviews, games, personality assessments, or other digital methods.
A disability could potentially affect how someone interacts with a particular system.
New York City’s AEDT requirements include notice about how candidates can request a reasonable accommodation.
If a candidate cannot effectively participate in an automated assessment because of a disability, the accommodation process may become important.
Employees and applicants should not assume that an AI assessment is automatically appropriate for everyone.
What If an Employee Is Rejected by AI?
Getting rejected by an automated system doesn’t automatically mean discrimination occurred.
There could be many legitimate reasons why an applicant wasn’t selected.
But if a worker has reason to believe that a protected characteristic played a role, the situation may deserve closer attention.
Useful questions include:
- Was an automated tool used?
- Was the applicant notified?
- What information did the system evaluate?
- Was the tool independently audited?
- Did the employer provide an accommodation process?
- Were similarly qualified applicants treated differently?
- Was there a human review?
- Did the employer provide another explanation for the decision?
These questions can become particularly important when the employer is using an AEDT covered by New York City’s law.
What Should Employers Do?
Employers using AI should think beyond simply purchasing software.
A practical compliance approach can include:
Understand What the Tool Actually Does
An employer should know whether a system merely organizes information or actually helps make employment decisions.
That distinction can matter under New York City’s AEDT rules.
Review Bias-Audit Requirements
If a tool qualifies as an AEDT under NYC law, employers need to ensure that the required bias audit has been conducted and that applicable information is publicly available.
Give Required Notices
Employers should provide applicants and employees with the notices required by the law before using a covered tool.
Keep Human Oversight
AI can assist with decision-making, but employers should not blindly accept every recommendation generated by software.
A human review process can help identify obvious errors and questionable outcomes.
Protect Employee Information
AI systems may process large amounts of personal information.
Employers should understand what information the system collects, where it goes, how long it is retained, and who can access it.
What Should Job Applicants Do?
You don’t need to become an AI expert to protect yourself.
If you’re applying for jobs in New York City, pay attention to notices about automated employment decision tools.
If you receive an AEDT notice, read it instead of automatically clicking past it.
If you need a reasonable accommodation, follow the employer’s stated process.
And if you believe an automated system has treated you unfairly because of a protected characteristic, keep records of what happened.
Save:
- Job advertisements
- Emails
- Assessment instructions
- Automated notices
- Interview communications
- Rejection messages
- Accommodation requests
- Other relevant correspondence
A screenshot can sometimes be valuable if an online job posting later disappears.
What About AI Monitoring Current Employees?
AI isn’t only being used for hiring.
Employers may also use automated systems to analyze productivity, attendance, work patterns, communications, or performance.
That can raise additional questions involving privacy, discrimination, workplace policies, and other employment laws.
The legal answer depends heavily on what information is collected, how it is used, and what employment decision results from the technology.
New York City has also enacted a 2026 law requiring a study of the impacts of algorithmic tools and automated employment decision tools on city employees and their municipal work.
That shows how quickly the conversation around workplace AI is expanding beyond hiring.
AI and Pay Decisions
AI may also influence compensation decisions.
For example, software might analyze employee performance and recommend:
- Raises
- Bonuses
- Promotions
- Compensation adjustments
If an algorithm produces discriminatory pay outcomes, the employer may still have to answer for those outcomes.
AI doesn’t make wage and discrimination laws disappear.
Employees who notice unusual pay differences should keep their pay records and other relevant documentation and consider getting legal advice if they suspect unlawful discrimination.
Can Employees Challenge an AI Decision?
Potentially, depending on the circumstances.
There isn’t a universal rule that gives every employee a right to demand that an employer reveal every detail of an AI system.
However, workers may have legal protections if the underlying employment decision violates an applicable law.
For example, an AI-assisted decision could potentially be relevant to a discrimination, retaliation, wage, or accommodation dispute.
The specific facts matter.
What Happens If an Employer Violates NYC’s AEDT Rules?
New York City allows people to report employers or employment agencies that use an AEDT without meeting applicable requirements.
The NYC Department of Consumer and Worker Protection specifically identifies complaints involving missing bias audits, failure to post audit information, and failure to provide required notices.
A complaint can include information such as the date of the suspected violation, the job posting or position, the name of the tool if known, and information about any notice that was provided.
Frequently Asked Questions
1. Is AI hiring legal in New York?
AI-assisted hiring is not automatically illegal. However, employers must comply with applicable employment laws. In New York City, certain automated employment decision tools are specifically regulated under Local Law 144.
2. Does every AI tool used by an employer require a bias audit?
No. The NYC requirements apply to covered automated employment decision tools, not every piece of software that happens to use AI. Whether a particular system falls within the law depends on how the tool is used and whether it meets the legal definition.
3. Does an employer have to tell me if AI is used in hiring?
For covered AEDTs in New York City, employers and employment agencies must provide required notices to candidates and employees.
4. Can I complain if an AI system discriminates against me?
Potentially. If you believe an AI-assisted employment decision resulted in unlawful discrimination, you may have options under applicable employment laws. In NYC, you can also report certain violations of the AEDT requirements to the Department of Consumer and Worker Protection.
5. Do employers have to stop using AI?
Not necessarily. The law generally focuses on how covered automated employment decision tools are used and the safeguards and notices required, rather than banning AI from employment decisions altogether.
Final Thoughts
AI is changing the workplace faster than many traditional employment practices can keep up. A résumé may be screened by software before a recruiter ever sees it. An algorithm may recommend candidates for an interview. An automated system could influence who receives a promotion.
But the involvement of AI does not erase worker protections.
For New York City employers using covered automated employment decision tools, bias audits, public information, and required notices are already part of the legal landscape.
For employees, the practical lesson is simple: if you suspect that an AI-assisted decision was unfair or discriminatory, don’t immediately assume that there is nothing you can do. Keep the relevant records, ask questions about the process when appropriate, and consider speaking with an employment attorney if the situation could involve a legal violation.
