Chicago Business Attorney Blog
If your company uses software to screen resumes, score job applicants, schedule interviews, evaluate performance, or decide who gets promoted, you may already be violating Illinois law.
That is not a hypothetical. It is the current legal reality for employers operating in Illinois as of January 1, 2026.
A lot of business owners in the Chicago area know AI tools are somewhere in their hiring process. What most do not know is that Illinois now treats the misuse of those tools as a civil rights violation, with penalties that can reach $70,000 per violation, plus actual damages and attorneys’ fees. And critically, intent does not matter. If your AI produces a discriminatory outcome, you are liable whether you meant for that to happen or not.
What the Law Actually Says
Illinois House Bill 3773, signed by Governor Pritzker in August 2024 and effective January 1, 2026, amends the Illinois Human Rights Act to directly regulate artificial intelligence in employment. The law covers AI used in:
- Recruitment and job postings
- Resume screening and applicant ranking
- Hiring decisions
- Promotion and training selection
- Renewal of employment
- Discipline and discharge
- Any decision affecting the terms, privileges, or conditions of employment
The statute defines AI broadly as any machine-based system that infers, from the input it receives, how to generate predictions, recommendations, decisions, or other outputs that can influence employment outcomes. That definition covers generative AI, automated screening tools, video interview analysis software, personality and aptitude assessment platforms, and performance management systems.
Two categories of conduct are now civil rights violations under the Illinois Human Rights Act:
First, using AI that has the effect of subjecting employees or applicants to discrimination based on a protected class. Protected classes under the IHRA include race, color, religion, national origin, ancestry, age, sex, sexual orientation, order of protection status, marital status, disability, military status, and citizenship status.
Second, failing to notify employees and applicants when AI is being used to influence or facilitate a covered employment decision. Notice is required regardless of whether the AI actually produces a discriminatory result. The notification obligation exists independently of the discrimination prohibition.
The Part Most Employers Are Missing
Every employer conversation about this law tends to focus on whether the AI tool discriminates. That is an important question, but it is not the only one.
The notice requirement catches employers off guard because it applies even when the AI is working perfectly. If you use an applicant tracking system to rank resumes and never send written notice to applicants that AI is being used to evaluate them, you are in violation. Full stop.
The Illinois Department of Human Rights released draft rules in late 2025 under the title “Subpart J: Use of Artificial Intelligence in Employment.” While those rules are not yet final, they lay out the direction enforcement is heading. Under the draft rules:
- Notice must be in writing
- Notice must be in plain language
- Notice must be available in languages commonly spoken by the workforce
- Notice must be reasonably accessible to employees with disabilities
- Notice is required whenever AI is used to influence or facilitate a covered decision, not just when it makes the final call
That last point deserves emphasis. The standard is whether AI is used to influence or facilitate a decision, not whether it is the sole decision-maker. If a human manager reviews an AI-generated recommendation and acts on it, the notice requirement still applies.
Third-Party Tools Do Not Shift Your Liability
Many employers assume that if a vendor’s AI discriminates, the vendor is responsible. That is not how Illinois law works.
The statute extends compliance obligations to employers’ agents, including recruiters and other third parties acting on an employer’s behalf. If you pay a recruiting firm that uses AI scoring tools, and those tools produce discriminatory outcomes, you face liability alongside the vendor. Your contract with a vendor does not insulate you from an IHRA charge.
This means vendor due diligence is now a legal obligation, not just a best practice. Employers need to understand what AI their vendors use, how it works, and whether that vendor can provide documentation of bias testing and impact assessments.
What Illinois Employers Can Actually Be Liable For
Violations of HB 3773 move through the existing IHRA enforcement framework, which has real teeth. Depending on the circumstances, an employer found in violation faces:
- Actual damages to make the complainant whole
- Civil penalties ranging from $16,000 to $70,000 depending on the number of violations
- Attorneys’ fees payable to the complainant
- Compliance reporting obligations imposed by the IDHR
- Additional remedial measures as determined by the Illinois Human Rights Commission
On top of that, the Illinois Attorney General can pursue civil actions for pattern-or-practice violations. If a business is running a systematically discriminatory screening process, even unknowingly, the exposure goes well beyond a single complainant.
What “Discriminatory Effect” Means When There Was No Discriminatory Intent
This is the part of the law that surprises most employers, and it matters more than anything else in the statute.
You do not need to intend to discriminate. You do not need to know your AI is discriminating. The law imposes liability based on outcomes. If the AI produces results that disproportionately screen out applicants of a particular race, age group, or disability status, that is enough.
How does this happen in practice? A few common examples:
Resume language filters that penalize non-traditional career paths tend to disproportionately screen out women and older workers.
Zip code filters used as a proxy for commute distance can function as a proxy for race or national origin in a city with Chicago’s segregated geography. Illinois HB 3773 explicitly prohibits using zip codes as a proxy for protected classes.
Video interview AI that scores facial expressions, word choice, or speaking patterns can disadvantage candidates with disabilities, non-native accents, or communication styles that differ from the training data.
Culture fit assessments built on historical hiring data often reflect and amplify the demographics of whoever was hired before. If your company historically hired mostly white men, an AI trained on those outcomes will tend to favor similar candidates.
None of these outcomes require anyone at your company to have discriminatory intentions. The tool produces the result. The employer bears the liability.
The Compliance Checklist Illinois Employers Need Right Now
The IDHR is still finalizing its rules. But the statute itself is already in effect, which means employers who have not yet taken these steps are already running a risk.
Step 1: Audit every AI tool in your employment process. Map out every software system that touches a hiring, promotion, performance, or discipline decision. Include applicant tracking systems, interview scheduling tools, resume screeners, video interview platforms, assessment and testing software, and any performance management system that uses automated scoring.
Step 2: Determine which decisions each tool influences or facilitates. The legal question is not whether AI makes the final call. It is whether AI plays any role in shaping the outcome. If a recruiter sees an AI-generated score before making a decision, the AI influenced that decision.
Step 3: Review your vendor agreements. Ask your vendors directly: does your tool use AI to evaluate candidates or employees? What testing has been done for discriminatory impact? Can you provide documentation? Vendors that cannot answer these questions clearly are vendors creating compliance risk for you.
Step 4: Draft and implement notice procedures. Every applicant and employee affected by AI-assisted employment decisions needs written notice. Work with counsel to develop disclosures that meet the statutory requirements and anticipate the IDHR’s final rules.
Step 5: Establish recordkeeping systems. The draft IDHR rules require employers to maintain records of AI system use, the employment decisions those systems informed, and any impact assessments conducted. Build those records now, before you need to produce them in response to a complaint.
Step 6: Train your HR team and hiring managers. The people making employment decisions at your company need to understand that using AI does not transfer legal responsibility. They also need to know what notice must go out, when, and to whom.
A Note on the Federal Landscape
Illinois employers should also be watching federal developments. A December 2025 Executive Order directed the U.S. Attorney General to establish an AI Litigation Task Force to evaluate state AI laws it considers inconsistent with federal policy. The practical impact of that order on Illinois employers is not yet clear, and HB 3773 is currently in effect regardless. But the regulatory environment is moving quickly, and positions taken now could shift within the year.
The safest posture is to build compliance with Illinois law now while staying alert to federal guidance as it develops. Companies that treat this as a compliance project rather than a legal firefight will be in a far better position than those waiting to see how enforcement plays out.
The Bottom Line for Chicago-Area Employers
HB 3773 is not a law about the future of AI. It is a law that applies to what your company is doing right now. If you are using any software that touches hiring, promotion, discipline, or performance evaluation, Illinois treats you as an employer who must understand that software well enough to verify it does not discriminate, notify the people it evaluates, and document what you did.
Most employers using AI tools have not done any of those three things. That gap between what the law requires and what businesses are actually doing is exactly where employment litigation tends to come from.
At Bellas and Wachowski, we have spent decades helping Chicago-area businesses navigate Illinois employment law before it becomes litigation. If your company uses AI in any part of its employment process and you are not certain your practices are compliant, now is the right time to find out.
Contact Bellas and Wachowski at (800) 825-9260 or visit businessattorneychicago.com to schedule a consultation.
George Bellas is a business litigation attorney and Illinois Super Lawyer with more than 50 years of experience representing businesses in state and federal courts. He is nationally recognized for his work on technology in litigation and e-discovery.