AI Recruiting

Automated Employment Decision Tool (AEDT)

Quick Definition

An automated employment decision tool (AEDT) is any computational process — including AI, machine learning, or other algorithmic techniques — used to substantially assist or replace human decision-making in hiring or promotion decisions, a term formally defined under New York City's Local Law 144.

What Is Automated Employment Decision Tool (AEDT)?

The term automated employment decision tool comes from New York City's Local Law 144, effective July 2023, which requires employers using an AEDT to screen candidates for employment or promotion within the city to obtain an independent bias audit of the tool, publish a summary of the results, and provide candidates notice before the tool is used along with the option to request an alternative process. Although the term originates in NYC law, it has become the standard reference point for discussing AI hiring tool regulation more broadly across the US.

The definition is deliberately broad — it captures not only AI interview scoring systems, but resume screening algorithms, candidate ranking tools, and any other computational process that substantially assists or replaces a human decision-maker in a hiring or promotion context. A tool that merely organizes or displays data without influencing the decision itself generally falls outside the definition, but the line between 'assisting' and 'merely displaying' is a genuine point of legal interpretation that employers deploying AI hiring tools need to evaluate carefully with counsel.

Beyond NYC, a growing number of jurisdictions have proposed or enacted their own AEDT-style requirements, including Illinois's AI Video Interview Act and emerging state-level legislation addressing algorithmic hiring tools more broadly. Employers deploying AI hiring technology across multiple jurisdictions increasingly need to treat AEDT-style bias audit and notice requirements as a baseline compliance expectation rather than a single-city peculiarity.

For employers evaluating or already using an AI interview, resume screening, or candidate ranking tool, the practical compliance chain runs through three steps: confirming whether the specific tool meets the applicable jurisdiction's AEDT definition, obtaining an independent bias audit before deployment (and periodically thereafter), and building the required candidate notice and alternative-process option directly into the hiring workflow rather than treating it as a one-time legal checkbox.

Why Automated Employment Decision Tool (AEDT) Matters

As AI tools take on a growing share of hiring decisions, the legal responsibility for any resulting bias sits with the employer deploying the tool, not the vendor who built it — understanding whether a given tool qualifies as an AEDT under an applicable law is the first step in managing that exposure.

Key Benefits

Clarifies which specific hiring tools trigger bias audit and notice obligations under laws like NYC Local Law 144
Creates a documented compliance record that can defend against a disparate impact claim
Builds candidate trust by disclosing when and how an automated tool is used in their evaluation
Establishes a consistent compliance framework applicable as more jurisdictions adopt similar requirements
Reduces vendor risk by clarifying that liability for adverse impact sits with the employer, not just the tool provider
Provides a structured basis for periodically re-auditing a tool rather than relying on a one-time launch review

Common Use Cases

Determining whether a newly adopted AI resume screening tool qualifies as an AEDT under NYC Local Law 144

Commissioning an independent bias audit before deploying an AI interview platform for NYC-based candidates

Building candidate notice and alternative-process language into a job application flow for AEDT-covered roles

Evaluating vendor AI hiring tools against AEDT-style compliance requirements as part of procurement due diligence

Frequently Asked Questions

What is an automated employment decision tool (AEDT)?

An AEDT is any computational process — including AI, machine learning, or other algorithmic techniques — used to substantially assist or replace human decision-making in hiring or promotion decisions. The term is formally defined under New York City's Local Law 144, effective July 2023.

What does NYC Local Law 144 require for AEDTs?

Employers using an AEDT to screen candidates for employment or promotion within NYC must obtain an independent bias audit of the tool, publish a summary of the audit results, and provide candidates notice before the tool is used, along with the option to request an alternative evaluation process.

Does an AI resume screening tool count as an AEDT?

Generally yes, if it substantially assists or replaces a human decision-maker in screening candidates. A tool that merely organizes or displays data without influencing the decision itself may fall outside the definition, but this distinction is a genuine point of legal interpretation employers should evaluate with counsel.

Is AEDT regulation limited to New York City?

No — while the term originates in NYC's Local Law 144, a growing number of jurisdictions have proposed or enacted similar requirements, including Illinois's AI Video Interview Act, making AEDT-style bias audit and notice obligations an increasingly common baseline compliance expectation.

Who is liable if an AEDT produces biased hiring outcomes?

Liability generally sits with the employer deploying the tool, not solely the vendor who built it — the EEOC has confirmed that employers bear responsibility for adverse impact from vendor AI tools regardless of contractual indemnification language.

InCruiter Products Related to Automated Employment Decision Tool (AEDT)

InCruiter AI Interview Software (IncBot)