What do employers need to know about the new Illinois law regulating the use of artificial intelligence? This FAQ guide provides an overview of the law, which goes into effect in 2026.
- What is the new Illinois AI law, and to whom does it apply?
Illinois’ new AI in Employment law is an amendment to the Illinois Human Rights Act specifically addressing the use of artificial intelligence (AI) in any employment-related decisions.
It applies to employers, employment agencies, and labor organizations within Illinois that use AI for decisions like hiring, promotion, discharge, and other terms of employment.
- When does the new Illinois AI law take effect and require compliance?
The new Illinois AI law takes effect January 1, 2026. Employers should ensure compliance by reviewing their use of AI in employment decisions and implementing notices and necessary changes before this date.
- What constitutes an "employer" under the new Illinois AI law?
An "employer" includes any person or entity employing one or more employees in Illinois during 20 or more calendar weeks within the current or preceding calendar year.
It also covers the state and its political subdivisions, public contract parties, and joint apprenticeship or training committees.
- Does the new Illinois AI law apply to employers without a physical location in Illinois?
Yes, the law applies to all employers (that employ one or more individuals within Illinois) regardless of whether the employer has a physical location in the state. This includes remote employers and those based outside Illinois that hire Illinois residents.
- What does the new Illinois AI law require?
Employers using AI in employment-related decisions must:
- Avoid using AI that results in discrimination based on protected classes, such as race, gender, age, or disability; and
- Provide notice to employees when AI is used for employment decisions, explaining its purpose and the characteristics it assesses.
- What is considered a "protected class" under the new law?
Protected classes include, but are not limited to, race, color, religion, national origin, sex, age, marital status, disability, military status, sexual orientation, pregnancy, and work authorization status.
- How should employers provide notice about the use of AI?
Employers must inform employees when AI is used for decisions about recruitment, hiring, promotion, or any other employment terms. The notice should include the specific purposes of the AI and any characteristics it assesses.
- Does the new law require bias audits or impact assessments for AI tools?
While the new law mandates transparency and non-discrimination, it does not specifically require bias audits or impact assessments. However to comply with the law, employers should take actions to ensure their AI tools do not result in discriminatory effects.
- Are there penalties for non-compliance with the new Illinois AI law?
Yes. Both the Illinois Department of Human Rights and the state’s Human Rights Commission will be charged with enforcing the law.
Applicants or workers who believe they have faced violations can file administrative charges, and after exhausting that process, private lawsuits and seek the same remedies available under the now current discrimination law, including uncapped compensatory damages, back pay, reinstatement or front pay, lost benefits, emotional damages, and attorneys’ fees.
- Does the new law allow employees to sue for violations?
The law does not explicitly grant a private right of action for employees to file lawsuits. Instead, the Illinois Department of Human Rights handles complaints and enforcement, and after exhaustion of administrative remedies, a complainant may receive a right to sue.
- How can employers ensure their AI tools comply with the new Illinois AI law?
Employers should conduct regular reviews or audits of their AI tools to ensure they do not result in discriminatory outcomes.
They also should provide necessary notices and keep updated with any rule changes or other requirements set by the Illinois Department of Human Rights.
- Does the new law provide any exemptions for certain employers?
Yes, the new Illinois AI law does not apply to places of worship, religious corporations, associations, educational institutions, societies, or non-profit nursing institutions that employ individuals of a particular religion to perform work related to their religious activities.
- What should employers do if their AI tools have potential discriminatory effects?
If an AI tool is found to have discriminatory effects, employers must take immediate corrective action to mitigate those effects and ensure compliance with this new law.
- How does the new Illinois AI law define “artificial intelligence”?
Under the new law, “artificial intelligence” refers to a machine-based system that uses inputs to generate outputs such as predictions, content, recommendations, or decisions influencing physical or virtual environments.
- Does the new Illinois AI law apply to AI tools developed by third-party vendors?
Yes, employers are responsible for any AI tool use, even if developed by third-party vendors. Employers must ensure that these tools comply with the new law’s requirements.
- What types of employment decisions are covered under the new Illinois AI law?
Under the new Illinois AI law, the use of artificial intelligence is regulated in various employment-related decisions. This included decisions related to:
- Recruitment and Hiring: All AI use to screen, evaluate, or select candidates for job openings.
- Promotion: AI tools used to assess employees for advancement opportunities.
- Renewal of Employment: Decisions to renew contracts or continue employment.
- Selection for Training or Apprenticeship: AI use to decide which employees or applicants are selected for training programs or apprenticeships.
- Discharge and Discipline: Decisions to terminate employment or to discipline employees based on AI-generated recommendations.
- Tenure: Determining employment tenure using AI.
- Terms, Privileges, or Conditions of Employment: Any other employment-related decisions influenced by AI, including, but not limited to, compensation, job assignments, and work conditions.
Employers must ensure that AI tools used in any of these areas comply with the non-discrimination requirements of the new Illinois AI law and provide the necessary notices to employees regarding the use of such tools.
