What are the penalties for not auditing AI hiring tools?

Penalties vary by jurisdiction:

**NYC Local Law 144:** $500 for the first violation, $500-$1,500 for each subsequent violation. Each use of an unaudited AEDT counts as a separate violation — meaning a company screening 1,000 candidates without an audit could face up to $1.5 million in fines.

**EU AI Act:** Up to €35 million or 7% of global annual turnover for non-compliance with high-risk AI requirements. Employment AI is explicitly classified as high-risk.

**California AB 331:** Penalties are being finalized but are expected to include civil penalties and a private right of action allowing individuals to sue.

**Colorado AI Act:** Up to $20,000 per violation under the Colorado Consumer Protection Act.

Beyond regulatory fines, companies face reputational damage, loss of talent, and potential class-action lawsuits under Title VII for discriminatory hiring practices.