A new law has taken effect in Illinois as of January 1, 2026 that will require employers to, among other things, notify employees if and when they use AI in employment decisions. The new law amends the Illinois Human Rights Act (“IHRA”)—the state’s anti-discrimination law.
The new law defines AI quite broadly to include any machine-based system that generates “outputs” (e.g., predictions, content, recommendations, etc.) influencing employment decisions, such as those on “recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or the terms, privileges or conditions of employment.”
The law goes so far as to prohibit unintentional discrimination (e.g., disparate impact) resulting from the use of AI—not just intentional discrimination (e.g., disparate treatment). The law itself does not yet require formal assessments for potential disparate impacts, unlike some other state laws that have arisen across the country. But the potential liability for such impacts remains, nonetheless.
This is not the first (and probably not the last) law in Illinois on use of AI in employment. Law already exists regulating employers’ use of AI in video interviews of prospective employees. This new law, however, goes well beyond video interviews and applies broadly to all sorts of decisions in the employment context.
The Illinois Department of Human Rights—the state agency entrusted with enforcement of the IHRA—recently shared draft regulations to guide the interpretation and enforcement of the new law. But those rules are not finalized yet, so stay tuned for further developments.
In short, Illinois employers who use AI in making employment decisions should immediately heed the requirements of this new law and take proactive steps to ensure legal compliance and mitigate against litigation risks. Contact an attorney with our Labor & Employment Team for further details on how best to prepare for this new law.
