Illinois AI Hiring Law Expands Protections Against Bias in 2026

A new Illinois AI hiring law expands civil rights protections by regulating how employers use artificial intelligence in hiring and employment decisions. Effective January 1, 2026, Illinois House Bill 3773—now Public Act 103-0804—amends the Illinois Human Rights Act to address a growing concern nationwide: discriminatory outcomes caused by automated decision-making systems.

This new legislation defines artificial intelligence (AI) as any machine-based system that infers how to generate outputs such as predictions, recommendations, or decisions that influence physical or virtual environments. It includes both traditional predictive analytics and generative AI (GenAI), which can simulate human-produced content, such as text, images, and audio or video output.

Under the Illinois AI hiring law, employers are prohibited from using AI tools in a manner that results in discrimination against individuals based on race, sex, age, disability, or any other protected class. The law applies broadly to various employment activities, including hiring, promotion, training, renewal of employment, and termination. It also prohibits indirect discrimination, including the use of zip codes or algorithmic proxies that disproportionately impact protected groups.

By integrating AI oversight into the Illinois Human Rights Act, the law signals a significant step forward in protecting job seekers from algorithmic bias. As artificial intelligence tools become more common in the hiring process, Illinois aims to ensure that innovation doesn’t come at the expense of civil rights.

What Illinois HB3773 Means for AI in Hiring and Employment

Public Act 103-0804 codifies a proactive legal framework to prevent civil rights violations stemming from AI-powered employment tools. With this amendment to the Illinois Human Rights Act, Illinois becomes one of the first states to explicitly regulate the use of AI in hiring under anti-discrimination law.

The law defines AI as a machine-based system that processes input to produce outputs—such as predictions, classifications, or rankings—that can influence employment decisions. It also includes a specific definition for generative AI, which produces content (like text or images) in response to human prompts. These definitions are important because they ensure the law applies to a wide range of technologies already in use by employers.

HB3773 makes it a civil rights violation to use AI in any employment-related decision that results in unlawful discrimination. This includes recruiting, interviewing, hiring, promoting, disciplining, discharging, and determining conditions of employment. If an employer’s algorithm disadvantages a candidate based on a protected class, that employer may now be held legally accountable.

This new law builds on previous efforts in Illinois to regulate AI in employment, such as the Artificial Intelligence Video Interview Act of 2020. It expands the conversation from video analytics to all forms of AI, affirming that fairness and transparency must remain at the center of modern hiring practices.

New Responsibilities and Risks for Employers Using AI Tools

The Illinois AI hiring law places specific obligations on employers who use automated tools to evaluate job applicants or employees. These obligations go beyond general compliance with existing discrimination laws by directly addressing how data and algorithms can introduce bias—often unintentionally.

Employers must now be mindful of how their AI systems are trained, what data they rely on, and whether they are producing disparate outcomes for protected classes. If a system favors certain demographic groups over others—whether based on race, age, or location—the employer may be liable for discriminatory practices.

One key concern raised by lawmakers was the use of ZIP codes as a proxy for racial or socioeconomic status. Under the new law, employers can no longer rely on geographic filters or algorithmic shortcuts that correlate with protected characteristics. The burden is on employers to ensure their AI models do not indirectly discriminate.

Employers will also be required to notify employees and applicants when AI is being used in the hiring process. The Illinois Department of Human Rights (IDHR) has been empowered to adopt and enforce rules, which will likely include detailed implementation and transparency guidelines. Businesses must now begin reviewing their use of AI to identify and mitigate risks ahead of the law’s 2026 enforcement date.

How Illinois Is Shaping the Future of Fair Hiring with AI

Illinois joins a growing number of jurisdictions taking legislative action to address AI bias in the workplace. Similar laws in New York City, Colorado, and Tennessee reflect a national effort to regulate algorithmic hiring tools that have been in operation for years without sufficient oversight.

What sets Illinois apart is its integration of AI regulation directly into the Illinois Human Rights Act, one of the state’s most potent anti-discrimination statutes. This elevates AI bias from a compliance issue to a civil rights concern—placing the protection of workers front and center.

The Illinois AI hiring law reflects the state’s ongoing leadership in regulating emerging technologies. It builds on earlier laws, such as the Artificial Intelligence Video Interview Act. It aligns with proposed measures like the Automated Decision Tools Act, which could require companies to conduct and share impact assessments of their AI systems.

Anticipated guidance from the IDHR will help employers interpret and apply the law. Still, Illinois is already sending a clear message: AI must not reinforce the very inequities employment laws are designed to eliminate. For employers, this is a call to audit and align their hiring systems now, not later.

For job seekers, particularly those from historically marginalized communities, the law offers new assurance that their resumes won’t be filtered out by biased algorithms. In an era when AI is increasingly playing a role in nearly every stage of employment, this is a significant and much-needed safeguard.

Preparing for AI Regulation in Illinois Workplaces

With the Illinois AI hiring law set to take effect on January 1, 2026, employers must begin preparing now to ensure compliance and fairness in their hiring processes. This includes reviewing all automated tools used in employment decisions and evaluating whether those tools may produce biased or discriminatory outcomes.

Employers should prioritize transparency—informing applicants when AI is used—and maintain documentation showing how systems are tested for fairness. Internal audits, vendor accountability, and diversity metrics will all play a role in demonstrating compliance. It's also critical to revisit hiring practices that rely on location, keyword scoring, or other filters that may disadvantage certain groups.

Forthcoming rules from the Illinois Department of Human Rights will shape the law’s implementation. These rules are expected to provide clarity on notice requirements, permissible use cases, and best practices for monitoring AI outcomes. Employers should closely track this guidance to avoid penalties and legal challenges.

Ultimately, this legislation marks a broader cultural shift toward the ethical use of AI. As technology transforms the hiring landscape, Illinois is leading with a legal framework that protects job seekers’ civil rights. Fairness, not just efficiency, must define the future of work. The Illinois AI hiring law ensures that innovation does not override the principles of equity and inclusion in employment.

To better understand your rights surrounding artificial intelligence and hiring decisions, contact the civil rights and employment law firm of O’Malley & Madden, P.C.