NEW YORK — The City Council on Tuesday introduced a bill that would substantially restrict the use of algorithmic hiring tools by contractors that hold city business, requiring disclosure of accuracy and disparate-impact data and submission to independent audits as a condition of contract eligibility.

The bill, the Algorithmic Employment Decision Disclosure Act, builds on the city's existing automated employment decision tool law but tightens the requirements substantially for entities that participate in publicly funded work.

What the bill requires

The bill would require any contractor that uses an algorithmic screening tool to make hiring or promotion decisions to provide, to a city office that would be created by the bill, performance data covering accuracy by demographic group, false-positive and false-negative rates, and any known disparate-impact findings.

It would also require an independent audit, performed annually by a city-approved auditor, that confirms the disclosed data and reviews the tool's behaviour on a small sample of recent hiring decisions. Audits would be funded by the contractors themselves, on a sliding scale linked to the tool's volume of use.

What is excluded

The bill exempts tools that perform only logistical functions — scheduling interviews, parsing applicant tracking system entries, or matching keywords against job descriptions. The exemption is narrow and excludes tools that influence the order in which candidates are reviewed or the weight given to particular candidates.

The line between the exempt and non-exempt categories is, in practice, fuzzy. Several tools widely used in the New York-area labour market sit close to the boundary, and the bill instructs the city office to issue interpretive guidance within ninety days of the bill's enactment.

The reaction from contractors

Industry associations responded within hours of the bill's introduction. The dominant theme of their pushback is not opposition to disclosure in principle — the existing law established that principle — but concern about the audit cost and the proposed timeline for compliance.

Smaller staffing firms, in particular, argue that the audit cost would be disproportionately burdensome. The bill's sponsors have indicated they are open to scaling the audit requirement for entities below specified revenue thresholds, but have not yet committed to a specific carve-out.

The reaction from labour advocates

Labour-side advocates have welcomed the bill but pressed for two specific amendments. The first would extend the requirements to subcontractors operating on city-funded projects, not just prime contractors; the second would require contractors to provide individualised disclosure to applicants who request it.

The sponsors have signalled support in principle for both amendments and have indicated they expect them to be incorporated into the version that emerges from committee.

What the city office would do

The bill creates a small city office with three responsibilities: receiving and reviewing the required disclosures, maintaining an approved-auditor list, and issuing interpretive guidance. The office would not have direct enforcement authority; enforcement would proceed through the existing procurement channels.

The procurement framing has been described, by sponsors, as the bill's central design choice. It avoids the constitutional complexities that direct regulation of private hiring decisions would raise, while still creating substantial pressure on contractors that depend on city work.

What happens next

The bill is scheduled for a hearing in late May. Sponsors expect committee passage in June and a full Council vote before the summer recess. The mayor's office has not formally taken a position; senior staff have indicated, in private, that the administration is broadly supportive but has technical questions about implementation.

If enacted, the bill would take effect six months after signing. The first round of disclosures would be required before the start of the following fiscal year.