As artificial intelligence (AI) becomes more widely used in hiring and employment decisions, Illinois has taken a significant step to regulate how employers must inform workers about AI’s use. Effective January 1, 2026, House Bill 3773 amended the Illinois Human Rights Act (IHRA) to require, among other things, employer notice when AI influences or facilitates employment decisions. According to reporting from the National Federation of Independent Business, the Illinois Department of Human Rights (IDHR) discussed at a recent stakeholder meeting draft rules to implement the notification requirement. See Subpart J — Use of Artificial Intelligence in Employment.

When Notice Is Required — And When It Isn’t

Under draft Subpart J, notice would be required whenever an employer uses AI to influence or facilitate any “covered employment decision.” A covered employment decision means:

a decision with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.

The draft rules make clear that notice would be required regardless of whether the AI’s use has discriminatory effects — meaning even if the employer believes the technology is fair or unbiased, the notice obligation would still applies.

Examples that would trigger the notice requirement include:

  • Computer-based assessments, skills tests, or personality quizzes used to predict employee outcomes;
  • Resume screening or ranking by AI;
  • AI evaluation of facial expression, voice, or text in interviews;
  • Targeted job advertising driven by AI;
  • AI analysis of third-party data about workers or candidates.

Notice would not be required when an employer uses AI for general business tasks unrelated to influencing or facilitating covered employment decisions. For example:

  • Using AI to draft marketing content or internal reports;
  • Standard word processing, spreadsheets, firewalls, anti-spam systems, or other tools that do not infer, generate, or influence employment decisions as defined.  

When To Provide Notice

Timing matters, and the rules would distinguish between current and prospective employees:

  • For current employees, notice must be provided annually, and within 30 days after adopting or making substantial updates to an AI system used for covered decisions.
  • For prospective employees, as part of the job notice or posting.

These timing requirements aim to ensure transparency throughout the AI adoption lifecycle.

How Employers Must Provide Notice

The draft regulations specify multiple methods to maximize employee awareness and reduce the risk that workers or applicants miss the disclosure:

  • Inclusion in employee handbooks, manuals, or policy documents;
  • Posting in conspicuous physical locations where employer notices are typically displayed;
  • Posting on an employer’s intranet or external website where the employer customarily posts notices to prospective or current employees, including a conspicuous link on the homepage; and
  • Included with any job notice and posting

What the Notice Must Include

Subpart J’s draft content requirements for notice would go well beyond a simple “yes/no” that AI is used. Required elements would include:

  1. The AI system’s product name and, if applicable, developer or vendor;
  2. Which covered employment decisions the AI system influences or facilitates (e.g., hiring, discipline);
  3. The purpose of the AI system and the categories of personal information or employee data processed;
  4. The types of job positions the AI tool will be used for;
  5. A contact person — typically an HR representative — who can answer questions about the system and its use;
  6. How to request a reasonable accommodation related to the AI use; and
  7. Language from 775 ILCS 5/2-102(L) of the IL Human Rights Act.

Accessibility Requirements

Notably, the draft rules emphasize that notices must be accessible:

  • Plain language and a readable format;
  • Availability in languages commonly spoken by the employer’s workforce;
  • Reasonable accessibility for employees with disabilities.

This accessibility focus aligns with broader non-discrimination goals and reinforces meaningful notice beyond mere disclosure.

Context: Statute and Federal AI Policy

The notice requirement stems from Illinois’ 2024 amendments to the Human Rights Act in HB 3773, which added AI use to nondiscrimination protections and included a statutory notice mandate without detail — leaving specifics to IDHR regulations.

Other jurisdictions like Colorado and New York City also regulate AI and automated tools used in hiring — though Illinois’ approach stops short of mandatory bias audits or impact assessments.

At the federal level, the regulatory landscape is shifting. A December 2025 Executive Order (EO) titled Ensuring a National Policy Framework for Artificial Intelligence directs the U.S. Attorney General to establish an AI Litigation Task Force that will evaluate and potentially challenge state AI laws deemed “inconsistent” with federal policy.

Conclusion

Illinois’ draft Subpart J notice rules would establish a comprehensive, detailed disclosureframework for employers using AI in covered employment decisions — aiming for informed consent and transparency across the workforce.

However, with federal policy now pushing toward a national AI regime, state laws like Illinois’ may increasingly be scrutinized or even litigated in the coming years. Staying ahead of both state notice requirements and the evolving federal policy environment will be critical for employers using AI in hiring and workforce decisions.

Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

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