Null Compliance: NYC Local Law 144 and the Challenges of Algorithm Accountability

TL;DR

This study investigates NYC Local Law 144, the world’s first law mandating bias audits for commercial automated employment decision tools, and analyzes how disclosure design and employer discretion shape enforcement and job-seeker power. Using 155 student investigators across 391 employers, the authors document surprisingly low posting rates for audit reports and transparency notices, and introduce the concept of null compliance to capture information gaps created by discretionary scope and non-centralized reporting. The analysis reveals that audits tend to report high impact ratios and that disclosures are often hard to find, poorly explained, and interwoven with other notices, limiting their practical effect on reducing discrimination. The findings highlight a fundamental tension between transparency-driven regulation and regulatee discretion, offering policy lessons on scope design, centralized reporting, and user-friendly notice mechanisms to improve algorithmic accountability in employment contexts.

Abstract

In July 2023, New York City became the first jurisdiction globally to mandate bias audits for commercial algorithmic systems, specifically for automated employment decisions systems (AEDTs) used in hiring and promotion. Local Law 144 (LL 144) requires AEDTs to be independently audited annually for race and gender bias, and the audit report must be publicly posted. Additionally, employers are obligated to post a transparency notice with the job listing. In this study, 155 student investigators recorded 391 employers' compliance with LL 144 and the user experience for prospective job applicants. Among these employers, 18 posted audit reports and 13 posted transparency notices. These rates could potentially be explained by a significant limitation in the accountability mechanisms enacted by LL 144. Since the law grants employers substantial discretion over whether their system is in scope of the law, a null result cannot be said to indicate non-compliance, a condition we call ``null compliance." Employer discretion may also explain our finding that nearly all audits reported an impact factor over 0.8, a rule of thumb often used in employment discrimination cases. We also find that the benefit of LL 144 to ordinary job seekers is limited due to shortcomings in accessibility and usability. Our findings offer important lessons for policy-makers as they consider regulating algorithmic systems, particularly the degree of discretion to grant to regulated parties and the limitations of relying on transparency and end-user accountability.

Figures (1)

• Figure 1: Kernel density showing the distribution of impact ratios for sex and race/ethnicity categories (N = 13 audit reports and 386 impact ratios) among publicly-posted audit reports