Illinois AI Hiring Law Takes Effect Before Its Rules Are Final

Artificial intelligence now sits inside many hiring workflows, often without the hiring manager noticing. Resume screeners rank applicants, scheduling tools filter availability, and job boards decide which candidates see which postings. State lawmakers have noticed, and 2026 is the first year several of their rules have real teeth.

Illinois went first, then stalled

Illinois House Bill 3773, signed in August 2024 as Public Act 103-0804, took effect on January 1, 2026. It amends the Illinois Human Rights Act to prohibit employers from using AI that has the effect of subjecting employees or applicants to discrimination based on a protected class. It also requires employers to notify applicants and employees when AI is used in decisions about recruitment, hiring, promotion, selection for training, discharge and other terms of employment.

The law does not require formal bias audits, which sets it apart from New York City's rule. It also has no carve-outs for particular types of AI. Enforcement runs through the existing Illinois Human Rights Act process, meaning complaints are filed as charges with the Illinois Department of Human Rights.

The problem is that employers still do not know exactly how the required notices should look. The department published proposed rules on May 15, 2026, with a comment period and a public hearing set for June 10. On June 2, it withdrew and postponed the proposal and canceled the hearing without announcing a new timeline. According to Ogletree Deakins, as summarized by compliance firm Bright Defense, the withdrawn rules would have extended the same duties to agents acting on an employer's behalf, including recruiters and other third parties.

Illinois also has an older law on the books. Its Artificial Intelligence Video Interview Act has applied since January 1, 2020 to employers that use AI to analyze recorded interviews.

Other states took different paths

Colorado passed one of the most ambitious AI laws in the country in 2024, then spent two years revising it. On May 14, 2026, the governor signed Senate Bill 26-189, which repealed and replaced the original Colorado Artificial Intelligence Act. Employers using AI in Colorado hiring should review the new version rather than older summaries.

Texas took a narrower route. Its Responsible Artificial Intelligence Governance Act, effective January 1, 2026, prohibits developing or deploying AI with the intent to discriminate and limits liability to intentional discrimination.

California's Civil Rights Council regulations, effective October 1, 2025, apply the state's Fair Employment and Housing Act to automated decision systems and require employers to keep AI-related records for four years. Separate California privacy regulations on automated decision-making technology take effect January 1, 2027 for significant decisions such as hiring. Connecticut's governor signed a broader AI responsibility and transparency act on June 2, 2026.

What employers should do now

The common thread across these laws is visibility. Employers cannot give notice about, audit or defend tools they do not know they are using. Bright Defense observed that the hardest part of complying with the Illinois law is not writing the notice but identifying every algorithmic tool that touches a hiring decision.

A practical first step is an inventory. List every system used in recruiting and employee decisions, including applicant tracking systems, assessment platforms, sourcing tools, chatbots and any features a vendor added through a software update. For each one, record what it does, which decisions it influences and which states it is used in.

Next, review vendor contracts. Ask vendors what data their tools use, whether they have tested for disparate impact, and whether they will support your compliance obligations. Then draft a plain-language notice for applicants that explains when AI is used and how a person can ask questions. Even where no law requires it, that notice builds trust with candidates.

Finally, keep a human in the loop for consequential decisions and document who reviewed what. That protects candidates and gives the employer a record if a decision is challenged.

Part of a larger compliance picture

AI rules are arriving alongside other changes to hiring practice, including state pay range disclosure laws and stricter Form I-9 enforcement. Candidates are also using AI tools to research employers, which raises the importance of an accurate public reputation, a subject we cover in our employer brand report. The employers that handle AI well will be the ones that treat it as a hiring practice to manage, not a feature to switch on.