As more employers incorporate artificial intelligence into their employment-related activities, it will be important to balance the benefits of using AI with the risk of unintended discriminatory outputs.

On August 9, 2024, Illinois enacted its landmark artificial intelligence employment law, HB 3773. This legislation, which amends the Illinois Human Rights Act, endeavors to prevent discriminatory consequences of using AI in employment decision-making processes. This law goes into effect on January 1, 2026. Illinois is one of 34 states that have either enacted or proposed laws regulating the use of artificial intelligence.

For employers with operations in Illinois who embrace the use of cutting-edge AI technology, this amendment constitutes the latest addition to the “employment law checklist.”

Illinois defines AI broadly as:

[A] machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments… [and] includes generative artificial intelligence.

See 775 ILCS 5/2-101(M).

HB 3773 prohibits an employer from using AI if it has a discriminatory effect on employees based on protected classes or uses ZIP codes as a proxy for a protected class. The law requires employers to give notice if the employer is using AI for the following employment-related purposes:

• Recruitment
• Hiring
• Promotion
• Renewal of employment
• Selection for training or apprenticeship
• Discharge
• Discipline
• Tenure (or the terms, privileges or conditions of employment)

See 775 ILCS 5/2-102(L)(1).

Illinois’ new AI law empowers the Illinois Department of Human Rights (IDHR) to adopt any rules necessary for the implementation and enforcement of this legislation. We anticipate the IDHR will issue guidance regarding implementation and enforcement prior to its effective date.

The amendment also appears to work in conjunction with the other Illinois AI laws that have either recently gone into effect or are pending before the state Legislature, including (1) the Illinois Artificial Intelligence Video Interview Act (820 ILCS 42/5) enacted in 2020, which applies to all employers that use an AI tool to analyze video interviews of applicants for positions based in Illinois; and (2) the proposed Automated Decision Tools Act (HB 5116), which would require “deployers” to perform an impact assessments that is accessible to the IDHR in employment decisions.

As more employers incorporate artificial intelligence into their employment-related activities, it will be important to balance the benefits of using AI with the risk of unintended discriminatory outputs. Illinois’ new AI law is notably sweeping in its scope―in that it impacts recruitment, hiring, promotion, retention, discipline, termination and benefits. The law also contains nebulous language, for instance, defining “the effect of subjecting employees to discrimination.” This broad language could have far-reaching implications.

While HB 3773 does not explicitly mandate audits, Illinois employers using AI technology should still work with counsel and experienced vendors to assess their systems for evidence of bias and discrimination. Illinois employers also need to monitor any directives issued by the IDHR regarding the new law, in particular with respect to any rules around notice and consent. Finally, this development confirms that the state of Illinois has AI squarely on its radar, and employers should take heed to properly utilize this potent technology.

For More Information

If you have any questions about this Alert, please contact Alex W. Karasik, Gerald L. Maatman Jr., Brandon Spurlock, Tiffany E. Alberty, any of the attorneys in our Artificial Intelligence Group, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.