On August 9, 2024, Illinois Governor JB Pritzker signed HB 3773, which amends the Illinois Human Rights Act (IHRA) to restrict an employer’s use of artificial intelligence (“AI”) in employment practices.
The law is comprehensive in that it restricts employers from using AI that has the effect of discriminating against employees (and job applicants) on the basis of a protected class in employment decisions, including recruitment, hiring, promotion, discipline, or terms, privileges, or conditions of employment. It also prohibits employers from using zip codes as a proxy for a protected class. The law requires employers to notify employees and applicants when using AI in the circumstances listed above, but does not specifically provide how notice should be given.
The amendment defines AI as a “machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.” AI specifically includes generative artificial intelligence.
The amendment goes into effect on January 1, 2026. Significantly, an employer is covered by the IHRA – and thus, the new AI restriction – if it employs one or more employees in Illinois during 20 or more calendar weeks within the calendar year of or preceding the alleged violation.
This is not the first Illinois law regulating the use of AI in the employment context. The Illinois Artificial Intelligence Video Interview Act took effect in January 2020 and requires employers who use artificial intelligence to analyze video interviews to: (1) provide notice to applicants that AI will be used; (2) explain how their AI program works and what characteristics the AI program uses to evaluate an applicant’s fitness for the position; (3) obtain the applicant’s consent to be evaluated by AI before the interview; (4) maintain confidentiality; and (5) destroy the video and copies within 30 days after an applicant requests such destruction.
The IHRA amendment comes after the Equal Employment Opportunity Commission (EEOC) issued a technical assistance document in May 2023 on the use of AI in employment decisions. In the guidance, the EEOC instructed employers to be wary of selection procedures that may have an adverse impact on a particular group of people, explaining that where an algorithmic decision-making tool (including those that use AI) has an adverse or disparate impact on individuals of a particular race, color, religion, sex, or national origin, (or individuals with a particular combination of such characteristics), the use of the tool will violate Title VII of the Civil Rights Act of 1964 unless the employer can show that such use is “job related and consistent with business necessity.”
Other states and localities have also recently enacted legislation on the use of AI in employment. In May 2024, Colorado enacted a sweeping AI framework, which seeks to prevent “algorithmic discrimination” and regulates the use of AI in certain employment contexts. The law is set to take effect in February 2026 and requires employers to provide notice to employees that AI is being used.
Similarly, New York City’s law on the use of “automated employment decision tools” (AEDT) took effect in January 2023. The law prohibits employers and employment agencies in New York City from using an AEDT in the hiring, promotion, or screening process, unless they complete a bias audit (an impartial evaluation by an independent auditor, conducted every year, which requires the employer to publicly share the result) and provide notice. However, if an AEDT is used to assess someone who is not an employee being considered for promotion and who has not applied for a specific position of employment (like scanning a resume bank, conducting outreach to potential applications, or inviting applicants), the bias audit and notice requirements do not apply.
The Illinois amendment and similar restrictions in other jurisdictions indicate that more AI regulation in the employment arena is coming. In light of the new addition to the IHRA, employers in Illinois should have a comprehensive understanding of how they use AI to make employment decisions and ensure that their practices do not have a discriminatory impact. The Illinois law does not have an audit requirement, but Illinois employers and companies with Illinois employees should be sure to have policies and procedures that comply with the new law including guidance on how to train employees on the use of AI and a practice to monitor compliance.
