Labor & Employment Law Daily Wrap Up, EXPERT INSIGHTS—Illinois anti-discrimination law to address AI goes into effect on 1 January 2026, (May 8, 2025)

Law Firms Mentioned:K&L Gates

Organizations Mentioned:K&L Gates, LLP

By Claire M. Healy, Kathleen D. Parker, and Erinn Rigney of K&L Gates LLP

Effective 1 January 2026, Illinois House Bill 3773 (HB 3773) amends the Illinois Human Rights Act, (IHRA) to expressly prohibit employers from using artificial intelligence (AI) that "has the effect of subjecting employees to discrimination on the basis of protected classes." Specifically, Illinois employers cannot use AI that has a discriminatory effect on employees, "[w]ith respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment."

Employers are increasingly using AI during the employment life cycle, including resume scanners, chatbots, and AI-powered performance management software. While AI tools can streamline processes and increase data-based decision making, they also carry risks, such as perpetuating bias and discrimination. In light of HB 3773, Illinois employers should be mindful of these risks and carefully select and regularly audit their AI applications to ensure that the applications do not have a discriminatory effect on applicants[1] and employees.

HB 3773 also requires employers to notify employees and applicants when using AI during recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or when the use could affect the terms, privileges, or conditions of employment To comply with this mandate, Illinois employers must understand how the AI-powered employment tools they are using work and impact employment decisions and explain their use of AI tools to employees and applicants in a way that is easily understandable. Illinois employers should consider working with counsel to prepare these mandatory disclosures now to ensure compliance with HB 3773 by 1 January 2026.

Footnotes

1 Although HB3773 does not explicitly refer to "applicants", the IHRA extends to job applicants and HB3773's requirements apply to "recruitment" and "hiring," which suggest that Illinois employers should comply with the new AI requirements with respect to applicants.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Claire M. Healy, Kathleen D. Parker and Erinn Rigney K&L Gates LLP

K&L Gates Center

210 Sixth Avenue

Pittsburgh

15222

United States

Tel.: +1 212 536 3900

E-mail: Sarah.Lamb@klgates.com

URL: www.klgates.com/

Attorneys: (K&L Gates).

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