Illinois HB 3773: What Employers Using AI in Hiring Must Do in 2026
8 min read · Last reviewed 1 Aug 2026
General information, not legal advice. Laws in this area change; verify against the official sources at the end of this guide and confirm specifics with employment counsel.
On January 1, 2026, Illinois became one of the broadest AI-hiring jurisdictions in the country. HB 3773 (Public Act 103-0804) amends the Illinois Human Rights Act, and because that act covers employers with even one employee, the new AI rules reach essentially every business that hires in Illinois, from a two-person shop to a warehouse operator.
The law is shorter and blunter than New York City's: it does not require a bias audit, but it prohibits using AI in a way that discriminates, bans ZIP codes as a proxy for protected classes, and requires you to tell people when AI is used in employment decisions. Here is what that means in practice for a small employer, and how it interacts with Illinois' older AI Video Interview Act. General information, not legal advice.
What HB 3773 is and who it covers
HB 3773 amends the Illinois Human Rights Act (IHRA), the state's core anti-discrimination law. That placement matters for two reasons. First, coverage: the IHRA applies to employers with one or more employees, so unlike federal Title VII (15-employee threshold), there is no realistic size exemption. If you employ anyone in Illinois or screen Illinois candidates, plan on complying. Second, enforcement: violations run through the Illinois Department of Human Rights (IDHR) charge process like any other discrimination claim, with the full remedies that come with it, rather than a fixed fine schedule.
The law covers the use of AI across the whole employment lifecycle: recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, and the terms, privileges, or conditions of employment. Resume screening and candidate ranking sit squarely inside "recruitment and hiring."
What counts as AI under the law
The definition is deliberately broad: a machine-based system that, for explicit or implicit objectives, infers from inputs how to generate outputs such as predictions, recommendations, content, or decisions that can influence environments. It explicitly includes generative AI.
Practically, that sweeps in more than the obvious resume-scoring tools. A chatbot that pre-screens applicants, a job-board feature that ranks your applicant list, a matching score inside your ATS, or an LLM you paste resumes into for a recommendation all fit the definition when their output influences an employment decision. The trigger is not the technology label but the use: if a machine-generated output shapes who advances, the statute is interested.
Note what the law does not do: it does not ban AI in hiring, does not require an independent audit like NYC, and does not require you to offer a non-AI alternative. The core duties are non-discrimination and notice.
The two prohibitions: discriminatory effect and ZIP-code proxies
First, an employer may not use AI in a way that has the effect of subjecting employees or applicants to discrimination on the basis of a protected class. The word "effect" is doing heavy lifting: intent does not matter. If your screening tool systematically ranks a protected group lower and you cannot justify the criteria as job-related, you have an IHRA problem even though nobody meant harm.
Second, the law specifically bans using ZIP codes as a proxy for protected classes. In a segregated metro area like Chicago, location data predicts race well enough that filtering or scoring by ZIP code can replicate redlining inside a hiring funnel. If any tool in your stack uses candidate location as a scoring signal for reasons other than a genuine job requirement (like a physical presence requirement you state openly), turn it off.
The defensive posture that follows from "effect" liability: know what your tool scores on, keep the criteria job-related, check your funnel for adverse impact periodically (the four-fifths self-check takes minutes), and keep records showing a human made the final call on evidence. Black-box tools make all four of those hard, which is the practical argument for explainable screening.
The notice duty
Employers must notify employees and applicants when AI is used for the covered purposes: recruitment, hiring, promotion, and the rest of the lifecycle list. The statute directs the IDHR to adopt rules on the timing and means of the notice, so the mechanical details (how many days, what channel) come from regulations; check the IDHR's current guidance for specifics.
Until and unless the rules say otherwise, the pragmatic approach is the one that satisfies every reading: put a short notice in the job posting and in your application confirmation email, before any AI touches the application. One or two sentences is enough: that an AI tool assists in screening applications, what it assesses (your criteria), and that a human makes final decisions. If you also hire in NYC, you already have a stricter notice to write, and one combined notice can serve both.
SiftFirst's free candidate notice generator produces this text from your actual screening criteria, so the notice says what the tool truly assesses instead of boilerplate.
Do not forget the AI Video Interview Act
Illinois has had a second, older AI hiring law since January 2020: the Artificial Intelligence Video Interview Act (820 ILCS 42). It applies when you use AI to analyze video interviews of applicants for Illinois-based positions. Before the interview, you must tell the applicant that AI may be used to analyze the video, explain how the AI works and what characteristics it evaluates, and obtain consent. Videos must be destroyed within 30 days of an applicant's request, sharing is restricted, and employers relying solely on AI analysis to decide who gets an in-person interview must report demographic data to the state.
If you only screen resumes and never run AI over interview videos, this act does not apply to you. If you use a one-way video interview product with automated analysis, check whether the vendor's disclosures and consent flow actually meet the statute, because the duty is yours, not theirs.
Between the two laws, the theme of Illinois' approach is transparency plus non-discrimination, not audits. That makes compliance cheaper than NYC, but the discrimination exposure is broader because the IHRA covers nearly every employer.
A practical checklist for Illinois employers
The short list for a small Illinois employer: (1) Inventory every tool that scores, ranks, filters, or analyzes candidates, including ATS features and video-interview products. (2) Add an AI-use notice to job postings and application confirmations, and update it when your criteria change. (3) Make sure no tool uses ZIP code or location as a scoring signal unless it is a stated, genuine job requirement. (4) Keep the criteria human-set and job-related, and keep records of scores, evidence, and who decided. (5) Run an adverse-impact self-check on your funnel a few times a year. (6) If you use AI video analysis, add the consent flow the Video Interview Act requires.
An explainable screening tool does most of this by construction. SiftFirst screens against criteria you set, quotes the resume line behind every score, never auto-rejects, and exports the records that show a defensible process; its free tools generate the notice and run the four-fifths check. Confirm the details, especially notice timing under current IDHR rules, with Illinois employment counsel.
Key takeaways
- ✓HB 3773 took effect January 1, 2026, inside the Illinois Human Rights Act, which covers employers with one or more employees: effectively everyone.
- ✓It prohibits AI with a discriminatory effect (intent is irrelevant) and specifically bans ZIP codes as a proxy for protected classes.
- ✓You must notify applicants and employees when AI is used in hiring and other employment decisions; IDHR rules govern the details, so a notice in the posting plus the confirmation email is the safe pattern.
- ✓No bias audit is required, unlike NYC LL144, but the discriminatory-effect standard makes periodic adverse-impact checks and job-related criteria your practical defense.
- ✓The separate AI Video Interview Act (2020) adds consent, explanation, and deletion duties if you use AI to analyze interview videos.
Screening built for these rules
SiftFirst scores candidates against criteria you set, quotes the resume line behind every score, never auto-rejects, and exports the records these laws expect. The candidate notice generator and bias audit self-check are free.
FAQ
Does HB 3773 require a bias audit like New York City?
No. Illinois requires notice and prohibits discriminatory use, but mandates no audit. That said, because liability attaches to discriminatory effect regardless of intent, periodically checking your funnel with something like the four-fifths selection-rate test is the practical way to catch a problem before a rejected candidate's lawyer does.
Which employers does it apply to?
The Illinois Human Rights Act applies to employers with one or more employees in Illinois, plus employment agencies. If you hire Illinois candidates or employ Illinois workers, assume it applies regardless of your size or where your company is registered.
What are the penalties for violating it?
Claims run through the standard IHRA process: a charge with the Illinois Department of Human Rights, potential proceedings before the Human Rights Commission or in court, and the usual discrimination remedies (back pay, damages, attorney's fees) rather than a per-violation fine schedule. The realistic cost driver is a discrimination claim you cannot document your way out of, which is why records and evidence-backed scoring matter.