Summary
- Adds a new paragraph (L) to Section 2-102 of the Illinois Human Rights Act, effective 1 Jan 2026.
- It is a civil rights violation for an employer to use AI, including generative AI, that has the effect of discriminating against people in protected classes in recruiting, hiring, promotion, renewal, training selection, discharge, discipline, tenure or terms of employment. Intent is not required.
- Using ZIP codes as a stand-in for a protected class is also a violation.
- Employers must give notice to employees when they use AI for those purposes. Failing to do so is a separate violation.
- IDHR must write rules on when, how and how fast notice is given. Proposed rules (May 2026) were withdrawn in June 2026 (secondary sources), so as of 2026-10-19 the statute applies without final implementing rules.
Who it applies to
- Employers covered by the Illinois Human Rights Act, which reaches any employer with one or more employees in Illinois for 20 or more weeks in a year (a long-standing IHRA definition; HRC training material confirms it applies with or without an Illinois office).
- Extraterritorial: yes, in the sense that an out-of-state or foreign employer with Illinois-based staff or applicants is covered.
- Vendors of HR AI tools are not directly named, but their employer clients carry the liability and will push requirements down.
Key dates
- Signed by the Governor as Public Act 103-0804 (date from secondary sources)
- Takes effect
- IDHR proposed notice rules published in the Illinois Register (secondary sources)
- IDHR withdraws the proposed rules and cancels the 10 June hearing (secondary sources)
Full date record
| Date | Event |
|---|---|
| 2024-08-09 | Signed into law (secondary sources; ilga.gov bill status page could not be reached) |
| 2026-01-01 | Effective |
| 2026-05-15 | Proposed IDHR notice rules published (secondary) |
| 2026-06-02 | Proposed rules withdrawn (secondary) |
Penalties and enforcement
- Workers and applicants file a charge with IDHR; cases can go to the Human Rights Commission or to court.
- Remedies described in the HRC training deck include compensatory and emotional distress damages, back pay, front pay, lost benefits and attorney fees.
- No reported enforcement decisions under paragraph (L) were found as of 2026-10-19.
What it means for an Indian company
- Indian HR-tech vendors (resume screeners, video interview analysis, assessments, workforce analytics) selling to US employers with Illinois staff should:
- Run and share disparate impact testing by protected class (SC-AI-017 Fairness and discrimination testing of outputs, SC-AI-013 Data bias and representativeness checks); "effect" liability means a fair-looking model can still breach the law.
- Remove ZIP code and other location proxies from features, or prove they do not act as proxies.
- Supply clients with notice-ready text: tool name, purpose, decision supported, data used, contact point (SC-AI-022 Disclose AI interaction to users, SC-AI-025 Public AI transparency statement and notices).
- Keep records of AI use; the withdrawn draft suggested four-year retention (SC-AI-032 Logging and record keeping).
- Indian IT firms with Illinois employees (on-site consultants, US subsidiaries) are employers under the Act if they use AI in their own hiring or performance reviews.
- Compare with NYC Local Law 144 (AEDT) (bias audit plus notice) and Colorado AI Act (SB 24-205, now SB 26-189) (risk management and impact assessments); one HR-AI control set can cover all three. See also SC-AI-038 Independent bias audit.
Obligations
Full obligation breakdown coming
We break the most requested policies down into numbered obligations mapped to controls. Leave your details and we’ll tell you when Illinois HB 3773 (AI in Employment) is done.
Glossary
- IHRA: Illinois Human Rights Act, the state's main anti-discrimination law.
- IDHR: Illinois Department of Human Rights, which investigates charges and makes rules.
- Protected class: a group the law protects, such as race, sex, religion, age or disability.
- Disparate impact: a neutral-looking practice that harms a protected group more than others.
- Proxy: a data point (like a ZIP code) that indirectly reveals a protected trait.
- Public Act: the number an Illinois bill gets once it becomes law.
Key takeaways
- In force since 1 Jan 2026 for any employer with Illinois staff.
- Bans AI with discriminatory effect and ZIP-code proxies in employment decisions, and requires notice of AI use.
- IDHR notice rules are not final; proposed rules were withdrawn in June 2026 (secondary sources).
Official sources
- Public Act 103-0804 (ilga.gov), text confirmed via a government-source search index; ilga.gov refused direct connections during this review, accessed 2026-10-19
- 775 ILCS 5/2-102 as amended, accessed 2026-10-19
- Illinois Human Rights Commission training deck on the law (2 Apr 2026, prepared by a law firm), accessed 2026-10-19
This is general information, not legal advice. Last verified 19 Oct 2026 against the official source. Laws change; confirm the current position with qualified counsel before acting.