New York's RAISE Act Sets AI Regulation Blueprint
New York’s Rights and Accountability in the Use of Automated Systems and Artificial Intelligence (RAISE) Act is emerging as a national model for regulating AI in employment. The act imposes requirements for mandatory bias audits for AI tools used in hiring and pay decisions. It also includes disclosure obligations, requiring employers to notify employees when AI is used in consequential decisions about them.
- The regulation, officially New York City Local Law 144, has been in effect since July 5, 2023, and applies to any employer using an "automated employment decision tool" (AEDT) to screen a candidate or employee for a role who resides in the city. - The law mandates an annual bias audit conducted by an independent third party to check for disparate impact based on sex, race, and ethnicity. - A summary of the most recent bias audit, including the number of applicants assessed and selection rates for different demographic groups, must be posted publicly on the employer's or employment agency's website. - Candidates must be notified about the use of automated tools in the hiring process at least 10 business days before such use and be informed about the job qualifications and characteristics the tool will use. - The law is enforced by the NYC Department of Consumer and Worker Protection (DCWP), which can impose penalties of up to $1,500 per violation per day. - While the card mentions a "RAISE Act," the law governing AI in hiring is NYC's Local Law 144; a separate state-level RAISE Act, signed in December 2025, regulates the developers of large-scale "frontier" AI models to mitigate catastrophic risks, not employment decisions.
