AI Employment Discrimination: Illinois Limits Artificial Intelligence in Decision-Making
As of January 1, 2026, Illinois takes a major step forward in curbing AI employment discrimination. As employers rely more heavily on artificial intelligence to make decisions affecting workers, this has become an increasingly important legal issue.
In fact, automated tools are now commonly used for employee hiring, termination, promotions, and training selection. While these systems are often promoted as neutral and efficient, they can replicate or amplify bias embedded in the data or criteria used to design them. In response, Illinois enacted new restrictions that take effect in 2026 to clarify how artificial intelligence may be used in employment decision-making and to reinforce existing civil rights protections.
The 2026 Illinois law does not prohibit artificial intelligence outright. Instead, it establishes clear limits on how AI may be used. Moreover, the law confirms that employers remain legally responsible for discriminatory outcomes, even when decisions are partially or fully automated.
Existing Illinois Law Governing AI Employment Discrimination
Illinois employment discrimination law is rooted in the Illinois Human Rights Act, which prohibits discrimination based on protected characteristics, including race, sex, disability, age, religion, national origin, sexual orientation, and other protected traits. These protections apply to a wide range of employment actions, including hiring, discharge, promotion, compensation, job assignments, and access to training or advancement opportunities.
Before artificial intelligence became widespread, these rules were enforced primarily in cases involving human decision-makers. However, the legal standard has always focused on outcomes rather than intent alone. Employment practices that disproportionately harm protected groups may violate the law even if discrimination was not deliberate.
As employers began using algorithmic tools to evaluate candidates, rank employees, or guide termination decisions, questions arose about how civil rights laws applied to these systems. Illinois addressed this issue by clarifying that AI-based tools are subject to the same anti-discrimination standards as traditional employment practices.
Key 2026 Illinois Law Changes Affecting AI Employment Discrimination
Beginning January 1, 2026, Illinois Public Act 103-0804 explicitly regulates the use of artificial intelligence in employment decisions. The changes focus on preventing discriminatory practices and increasing employee transparency.
The two primary changes introduced by the 2026 Illinois law are:
Expanded anti-discrimination protections: Employers may not use artificial intelligence in ways that result in discrimination in employee hiring, employee termination, employee promotions, employee training selection, or other employment decisions covered by the Illinois Human Rights Act. Employers are responsible for discriminatory outcomes even when AI tools are developed or operated by third parties.
Notice and data limitations: Employers must notify employees when artificial intelligence is used to make or substantially influence covered employment decisions. In addition, employers may not rely on ZIP codes or similar geographic data when using AI if such data serves as a proxy for protected characteristics.
These changes reflect legislative concern that automated systems can mask discriminatory practices behind technical processes that are difficult for employees to evaluate or challenge.
How AI Employment Discrimination May Affect Employees
Artificial intelligence can affect employees at multiple stages of employment, often without direct visibility into how decisions are made. Resume-screening tools may eliminate candidates before human review. Performance algorithms may weigh metrics that disadvantage workers with disabilities or caregiving responsibilities. Predictive models may flag certain employees as “high risk” for termination based on historical data that reflects past discrimination.
The 2026 Illinois law reinforces that employees are entitled to fair treatment regardless of whether supervisors or automated systems make decisions. If an AI tool produces biased results that affect pay, promotions, discipline, or continued employment, those outcomes may constitute unlawful discrimination under Illinois law.
Employees should be aware that retaliation protections continue to apply. Workers cannot lawfully be punished for asking whether artificial intelligence is being used, requesting explanations for employment decisions, or raising concerns about discriminatory practices. Documentation of employment decisions, notices regarding AI use, and communications with supervisors may be relevant if a dispute arises.
Illinois Clarifies Accountability for AI in Employment Decisions
Illinois’ 2026 law reinforces a core principle of employment law: employers remain accountable for workplace decisions, regardless of whether humans or machines make those decisions. By directly addressing artificial intelligence, the state has clarified that efficiency and automation do not excuse discriminatory outcomes.
For employees, the law provides greater transparency and clearer legal standards when artificial intelligence is used in hiring, promotions, termination, or training selection. For employers, it underscores the importance of evaluating AI tools carefully and monitoring their real-world impact on workers.
As artificial intelligence continues to play a larger role in employment decision-making, Illinois’ approach reflects an effort to balance technological innovation with longstanding civil rights protections. For legal guidance on employment and civil rights law, contact the Chicago-based firm of O’Malley & Madden, P.C.
