Resource guide · October 13, 2026
What can it cost to leave a hiring tool unexamined?
There is no single price tag. The financial exposure depends on the tool, the people affected, the law that applies, and what an organization does when concerns appear.
← All resourcesRegulatory penalties can be specific.
In New York City, covered employers and employment agencies cannot use an automated employment decision tool for covered screening unless it has had a bias audit within the prior year, a summary of results is public, and required notices are given. The law sets a civil penalty of up to $500 for a first violation and other violations on that first day, and $500 to $1,500 for each subsequent violation. Each day of use in violation can count separately; missing required notices can also be separate violations. These figures apply to the NYC law, not to every use of AI in hiring. NYC Local Law 144 ↗
A discrimination claim has a different cost profile.
Even where no specific audit law applies, selection procedures can raise discrimination concerns. Responding may involve counsel, collecting and reviewing hiring data, technical and statistical analysis, changes to the tool or workflow, and potential monetary or nonmonetary relief. The amounts are case-specific; these are planning categories, not a cost estimate. EEOC guidance on selection procedures ↗
In 2023, iTutorGroup agreed to pay $365,000 to resolve an EEOC lawsuit over application software programmed to reject older applicants automatically. The consent decree also required training, policy changes, and monitoring. This involved a programmed age filter, not a finding that a modern AI model went unaudited; the amount should not be used as a typical audit or litigation cost. EEOC case announcement ↗
What an audit can help answer
- Which tool version and settings are used for which roles and candidates?
- Are scores or selection outcomes different across relevant groups, and is the data good enough to assess them?
- Does the evidence support the way the organization uses the tool?
- Which findings need a change, further evidence, candidate notice, or legal review?
An audit can make risks visible and support decisions about controls. It does not guarantee legal compliance or prevent a claim.