Illinois HB 3773: AI Hiring Notice Requirements Employers Must Meet

The Illinois HB 3773 AI hiring amendments are now in force. Public Act 103-0804, signed on August 9, 2024, amended the Illinois Human Rights Act and took effect on January 1, 2026. It does two separate things: it makes it a civil rights violation to use artificial intelligence that has the effect of discriminating against a protected class, and it makes it a separate civil rights violation to fail to tell people you are using AI in employment decisions at all.

Most employers reading this are already exposed. If you screen resumes with a scoring tool, run a game-based assessment, or use interview analytics on anyone in Illinois, the notice duty applies to you today.

Key Takeaways

• Public Act 103-0804 took effect January 1, 2026 and amends the Illinois Human Rights Act at 775 ILCS 5/2-102(L).
• Discriminatory effect is enough. Intent is not required, and buying the tool from a vendor does not move the liability off the employer.
• Using ZIP codes as a proxy for a protected class is banned outright as a separate violation, whether or not a discriminatory outcome is proven.
• Failing to give notice is its own violation, independent of whether the AI discriminated against anyone.
• The Illinois Department of Human Rights published implementing rules on May 15, 2026 and withdrew them on June 2, 2026. The statute still binds you while the rules are unsettled.

What the Illinois Human Rights Act AI Amendment Actually Prohibits

The statute creates two distinct violations, and they operate independently. The first is substantive: an employer may not use artificial intelligence that has the effect of subjecting employees to discrimination on the basis of a class protected under the Illinois Human Rights Act. The second is procedural: an employer may not fail to provide notice that it is using artificial intelligence for those purposes.

The word doing the heavy lifting is "effect." There is no carve-out for good faith, no defense based on the vendor's assurances, and no requirement that anyone at your company intended a discriminatory result. If the tool produces a skewed outcome across a protected class, the statute is engaged. This mirrors the disparate impact framework the US Equal Employment Opportunity Commission applies under Title VII, so an Illinois employer is now facing overlapping state and federal exposure from the same screening decision.

The definition of artificial intelligence in the Act is deliberately wide. It covers machine-based systems that infer from inputs to produce predictions, recommendations or decisions, and it expressly includes generative AI. Embedded features inside an applicant tracking system count. A tool nobody in HR thinks of as "an AI product" still counts if it generates a recommendation that shapes a hiring call.

Covered Employment Decisions

The statute lists the decisions it reaches, and the list is broad enough to cover the full employment lifecycle: recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, and the terms, privileges or conditions of employment.

That final catch-all matters more than employers expect. Algorithmic scheduling, productivity scoring that feeds into discipline, and automated task assignment that affects pay all sit inside "terms, privileges, or conditions of employment." The duty does not stop at the offer letter.

The ZIP Code Proxy Ban

Illinois separately prohibits using ZIP codes as a proxy for a protected class. This is written as its own prohibition rather than as an example of discriminatory effect, which means an employer can breach it without any statistical showing of adverse outcomes.

Location variables rarely arrive labeled as such. A commute-distance score, a "local candidate" filter, or a model trained on the addresses of past successful hires can all carry the geographic signal that residential segregation loads with racial information. Ask your vendor whether any geographic field, derived or raw, enters the model, and get the answer in writing.

The Notice Duty and Where the Rules Stand

Notice is the obligation most employers are currently failing, because it bites even when nothing goes wrong. The Department circulated draft rules known as Subpart J, then formally proposed amendments to the Illinois Administrative Code on May 15, 2026 with a comment period running to June 29, 2026. On June 2, 2026 it temporarily withdrew the proposed rules and cancelled the scheduled hearing, citing the need for further work with other state agencies. No refiling date has been announced.

The statutory duty did not pause when the rules did. What the withdrawn draft tells you is the direction of travel, and it is worth building toward because the content it specified is reasonable regardless of the final text.

Under the withdrawn proposal, notice was required whenever AI was used to influence or facilitate a covered employment decision, whether or not discrimination resulted. The notice was to identify the AI system and its developer or vendor, the decisions the system influences, the system's purpose and the categories of personal data it processes, the job types it is used for, a contact point for questions, and information about the right to request a reasonable accommodation and how to do so. Current employees were to receive notice annually and within thirty days of adopting a new or substantially updated system; applicants were to receive it in the job posting itself. Records relating to AI use were to be retained for four years.

Liability Does Not Transfer to Your Vendor

Nothing in the Act lets an employer point at a supplier. Whether the tool was built in-house or licensed from a third party, the employer using it to make the decision answers the charge. The withdrawn rules went further and treated third parties exercising control over covered employment actions on your behalf, including recruiters, as within the employer definition.

That makes procurement diligence a compliance activity, not a purchasing formality. A vendor's claim that a product has been bias-tested is a starting point for questions, not an answer to them. Our guide to AI Vendor Accountability Recruitment: Your Legal Duty sets out what to demand contractually, and How to Audit Recruitment AI Algorithms for Bias covers running the outcome analysis on your own applicant flow rather than relying on a pooled vendor result.

Compliance Checklist for Illinois Employers

• Inventory every AI touchpoint - What it involves: List all tools that score, rank, filter, match or flag candidates or employees, including embedded features in your ATS, HRIS and scheduling software; Owner: HR operations
• Map each tool to a covered decision - What it involves: Record which of the listed decisions each tool influences or facilitates; Owner: HR operations
• Hunt geographic variables - What it involves: Confirm in writing whether ZIP code, commute distance, or any derived location feature enters any model; Owner: HR and vendor manager
• Publish a notice now - What it involves: Cover system name, vendor, decisions affected, data categories, contact point and accommodation route; place it in job postings, the handbook and your careers site; Owner: HR and legal
• Test outcomes by protected class - What it involves: Run selection-rate analysis at each stage on your own applicant data before go-live and at least annually; Owner: People analytics
• Retain the paper trail - What it involves: Keep notices, postings, disclosures and AI-use records; the withdrawn draft contemplated four years; Owner: HR and legal

Reducing Exposure by Changing What You Measure

The cheapest way to shrink algorithmic discrimination risk is to shorten the chain between the measurement and the job. A structured, job-relevant assessment that samples actual work tasks is easier to defend than an inferred trait score, because you can point at the duty it measures. Righteo's skill tests library and AI skill assessments are built around demonstrated task performance, and structured automated reference checks gather consistent, job-related input from referees rather than free-form impressions that vary by who asked.

None of that is a compliance certification. It reduces the surface area you have to defend, and it does not replace your own outcome testing, your own notice, or advice from counsel. More employer guidance sits in our HR and pre-employment resources.

Related Resources

Illinois General Assembly: Public Act 103-0804

Artificial Intelligence in Employment (Public Act 103-0804) - Illinois Department of Human Rights

US Equal Employment Opportunity Commission

How to Audit Recruitment AI Algorithms for Bias

AI Vendor Accountability Recruitment: Your Legal Duty

AI Skill Assessments

HR and Pre-Employment Resources and Articles

Frequently Asked Questions

Is Illinois HB 3773 in effect now?

Yes. Public Act 103-0804 took effect on January 1, 2026 and is currently binding on employers covered by the Illinois Human Rights Act. The withdrawal of the Department's proposed implementing rules in June 2026 paused the rulemaking, not the statute.

Which employers does the Illinois AI law cover?

It applies to employers covered by the Illinois Human Rights Act, which reaches far smaller organizations than most federal thresholds. Because coverage turns on the Act's own employer definition, confirm your status with counsel rather than assuming a headcount cutoff borrowed from federal law.

Do I need a bias audit under Illinois law?

The Illinois statute does not mandate a published independent bias audit the way New York City's Local Law 144 does. It instead prohibits discriminatory effect and requires notice. Outcome testing is still the practical way to know whether your tools create the effect the law prohibits.

What happens if I use AI but do not give notice?

Failing to give notice is itself a civil rights violation under the Act, separate from any discrimination claim. An employer whose tool produces perfectly even outcomes can still be in breach purely for staying silent about using it.

Does the law apply to generative AI used in recruiting?

The Act's definition of artificial intelligence expressly includes generative AI, so a generative tool that influences a covered decision falls within scope. The withdrawn draft rules distinguished this from purely operational uses such as drafting marketing copy that does not shape an employment decision.

This article is general information for US employers and is not legal advice. Confirm your obligations with employment counsel in the states where you hire.

The Notice Duty Is Your Immediate Gap

Illinois has moved the compliance question from whether your AI tools are fair to whether you can prove what they do and whether you told anyone you were using them. The notice duty is the immediate gap, because it applies whether or not your tools are producing clean outcomes, and it is the easiest thing an applicant can point at. Start with the inventory: you cannot write a notice for systems you have not listed. Once the inventory exists, publish an interim notice covering the content the withdrawn rules described, and have counsel review it against the final rules when the Department refiles.