NYC MSAs: Lock In Fair Terms, Prevent Discrimination Risks

Why MSAs matter in NYC

MSAs set the baseline for future statements of work and often govern vendors handling recruiting, staffing, customer-facing services, data processing, or AI-enabled tasks. In NYC, this is a primary control point for compliance with the NYC Human Rights Law (NYCHRL) and New York labor standards, helping you standardize fair dealing, avoid discriminatory effects, and respond quickly to investigations or audits. See NYC Administrative Code § 8-107 (employment, public accommodations, retaliation, harassment) and policy § 8-101 for broad construction of protections (ADC § 8-107; ADC § 8-101).

Core discrimination safeguards to build into your MSA

• Equal opportunity and non-discrimination: Require compliance with the NYCHRL across the service relationship, including prohibitions on discrimination, harassment, and retaliation in employment and public accommodations impacting customers or end users (ADC § 8-107(1), (4), (7)).
• Reasonable accommodations and cooperative dialogue: Obligate vendors to provide accommodations required by law and to cooperate with your processes, including NYC’s mandatory cooperative dialogue when accommodations may be needed (e.g., disability, pregnancy/childbirth, religious needs, domestic violence status) (ADC § 8-107(15), (22), (28)).
• Bias controls in hiring, promotions, and customer interactions: Prohibit selection or assignment based on protected characteristics; require job-related, documented criteria and structured workflows (NYC Human Rights Law overview).
• AI and automated tools: If vendors propose using automated tools:
  • Employment uses in NYC: Require compliance with NYC’s Automated Employment Decision Tools (AEDT) Law (Local Law 144), including notice and an independent bias audit where the law applies (generally to automated tools that substantially assist hiring or promotion decisions) (DCWP AEDT resources).
  • Customer-facing algorithms: Ensure use does not result in discrimination in public accommodations under NYCHRL; require appropriate testing and documentation even where no specific audit mandate applies (ADC § 8-107(4)).
• Complaint handling: Vendors must maintain channels to receive complaints, promptly notify you, and preserve relevant records for investigations.

Labor and wage protections to include

• Wage and hour compliance: Vendors must follow New York’s minimum wage and overtime rules for work performed in New York, and applicable federal standards. See NY Labor Law § 652 and NY DOL guidance on minimum wage and wage orders (LAB § 652; NY DOL Minimum Wage).
• Recordkeeping: Require maintenance of accurate payroll and hour records consistent with NY Labor Law § 661 (LAB § 661).
• Equal pay and pay transparency: Require compliance with equal pay obligations and New York’s pay transparency law for job postings where applicable (LAB § 194; LAB § 194-b). Local NYC pay transparency rules may also apply under NYCHRL.
• No retaliation: Prohibit retaliation for raising wage or discrimination concerns through any channel (see ADC § 8-107(7) and applicable labor laws).
• Subcontractor pass-through: Flow down wage, safety, and nondiscrimination obligations to subcontractors, with documentation and audit rights.

Vendor screening and ongoing monitoring

• Due diligence: Collect and review policies on EEO, anti-harassment, accommodations (including cooperative dialogue), and wage compliance. For higher-risk engagements (e.g., recruiting, customer support, data labeling/AI support), request training artifacts and example workflows.
• Risk-based oversight: Calibrate monitoring to service sensitivity and populations impacted.
• Incident escalation: Define timelines for notice of complaints, agency inquiries, data incidents, or material breaches, and require corrective action plans.
• Audit and cooperation: Reserve rights to review relevant records, training completion, and subcontractor controls.

Model clause ideas

• Compliance with NYCHRL and labor laws: “Vendor shall comply with all applicable federal, New York State, and New York City laws, including the New York City Human Rights Law, and with wage and hour laws, and shall not discriminate, harass, or retaliate in connection with services performed under this Agreement.”
• Accommodations and cooperative dialogue: “Vendor will provide reasonable accommodations as required by law and will engage in and cooperate with any required cooperative dialogue, and with Company’s accommodation processes.”
• Automated tools: “Vendor shall not deploy automated decision tools in employment-related or customer-facing contexts under this Agreement unless compliant with applicable law (including, where applicable, NYC’s AEDT law), with documented bias testing/audits where required, advance notice to Company, and provision of supporting documentation upon request.”
• Training: “Vendor will maintain annual training for personnel performing work under this Agreement on anti-discrimination, harassment prevention, and accommodations, and will certify completion upon request.”
• Subcontractors: “Vendor shall ensure all subcontractors agree in writing to obligations equivalent to those in this Section and shall remain responsible for their performance.”
• Remedies: “In addition to other remedies, Company may suspend performance, require corrective action, or terminate for material noncompliance.”

Data, privacy, and recordkeeping

• Purpose limitation and security: Limit data use to contracted purposes, with confidentiality and security measures consistent with your policies and applicable law.
• Retention: Retain and produce records sufficient to demonstrate compliance with nondiscrimination, wage, and safety obligations; preserve records tied to complaints or investigations.
• AI/analytics documentation: For AI or analytics services, require documentation of data sources, intended use, and fairness evaluations where applicable.

Governance: how to operationalize the MSA

• Ownership: Assign internal owners for vendor risk, legal, privacy/security, and business sponsorship.
• Intake: Use a checklist for discrimination, labor, and AI-tool considerations during onboarding.
• SOW alignment: Reference the MSA compliance sections in each SOW; confirm whether automated tools are in scope and what testing or notices are required.
• Review cadence: Schedule periodic reviews to verify training, subcontractor flow-downs, and incident logs; update terms as laws evolve.

When to seek counsel

Consult counsel when vendors recruit or assign workers in NYC, deploy automated tools affecting employment or customers, or handle sensitive customer interactions. Early legal review can tailor MSA controls to your industry risks and reduce the chance of costly disputes. Talk to our NYC employment team.

Key sources

• NYC Administrative Code § 8-107 (employment, public accommodations, retaliation, harassment)
• NYC Administrative Code § 8-101 (policy; liberal construction)
• NYC Commission on Human Rights – NYC Human Rights Law overview
• NYC DCWP – Automated Employment Decision Tools (Local Law 144)
• NY DOL – Labor Standards; NY DOL – Minimum Wage
• NY Labor Law § 652 (minimum wage); § 661 (records); § 194 (equal pay); § 194-b (pay transparency)

Notes on scope

The NYC AEDT law applies to certain automated tools used to substantially assist employment decisions for positions in NYC; it does not impose a general audit mandate on all customer-facing algorithms. However, NYCHRL’s public accommodations provisions still prohibit discriminatory outcomes in services. NYCHRL generally applies to employers with four or more employees (with some provisions, including harassment protections, applying more broadly). Contracting parties may adopt stricter internal standards than the legal minimums as a risk control.

Disclaimer

This blog focuses on New York City and New York State law as of the date listed and is for general informational purposes only. It is not legal advice and does not create an attorney–client relationship. Local requirements can vary by city and industry; consult qualified counsel about your specific facts before acting. Contact us for advice tailored to your situation.