Reference · Employment
Employment AI Laws: Illinois HB 3773, NYC Local Law 144, and Colorado SB 26-189
Three statutes, one question: where does AI touch an employment decision?
Three jurisdictions now regulate the use of artificial intelligence in employment decisions directly. Illinois amended its Human Rights Act (HB 3773, Public Act 103-0804) with effect from 1 January 2026. New York City has enforced Local Law 144 on automated employment decision tools since 5 July 2023. Colorado's SB 26-189, signed in May 2026, takes effect on 1 January 2027 and replaces the state's earlier AI Act. Each asks an employer to know where AI touches an employment decision, to tell the people affected, and to keep records.
Illinois HB 3773
Section 2-102(L) of the Illinois Human Rights Act (775 ILCS 5/2-102(L)) makes it a civil rights violation for an employer to use AI in recruitment, hiring, promotion, discipline, discharge, or terms of employment in a way that has a discriminatory effect on a protected class, or to use zip codes as a proxy for a protected class. It also requires notice to employees and applicants that AI is used for those purposes. The Illinois Department of Human Rights is directed to adopt rules on the notice.
New York City Local Law 144
- Applies to automated employment decision tools used to substantially assist or replace discretionary decisions on hiring or promotion for jobs in the city.
- Requires an independent bias audit within one year before use, a public summary of the results, and notice to candidates at least ten business days before use.
- Enforced by the Department of Consumer and Worker Protection since 5 July 2023.
Colorado SB 26-189
Signed on 14 May 2026 and effective 1 January 2027, SB 26-189 replaced Colorado's 2024 AI Act with a transparency and disclosure regime for automated decision-making technology used in consequential decisions, including employment. It requires an inventory of the technology in use, disclosure to affected individuals, an opportunity to correct information and request human review, and record-keeping. Until the effective date, obligations are readiness only.
Control mapping
What a reviewer expects to be able to see.
| Obligation | What the system must do | Evidence a reviewer expects |
|---|---|---|
| Inventory | Know which tools use AI in recruitment, hiring, promotion, and discipline, and which vendors sit behind them | Inventory with tool purpose, decision stage, vendor, and jurisdictions in scope |
| Notice | Tell applicants and employees that AI is used, with the timing and content each statute sets | Notice text, delivery records, and dates |
| Bias audit (NYC) | Obtain an independent bias audit within a year before use and publish a summary | Audit report, auditor independence, publication date |
| Proxy variables (Illinois) | Show zip codes are not used as a proxy for protected class | Feature documentation and data-flow records |
| Record-keeping | Keep a record of when the tool ran, on what data, and what it produced | Dated, tamper-evident decision records |
| Human review (Colorado, from 2027) | Offer correction and human review of consequential decisions | Review procedure and its operating records |
Key dates
- 5 July 2023New York City begins enforcing Local Law 144.
- 9 August 2024Illinois HB 3773 signed as Public Act 103-0804.
- 1 January 2026Illinois amendments to the Human Rights Act take effect.
- 14 May 2026Colorado SB 26-189 signed, replacing the 2024 Colorado AI Act.
- 1 January 2027Colorado SB 26-189 takes effect.
Primary sources
Common gaps
Where employers most often struggle.
- Vendor tools nobody classified. Applicant tracking systems ship ranking features that meet the NYC definition. If nobody decided whether the feature is an automated employment decision tool, the audit clock never started.
- Notice sent, not evidenced. A notice template in the careers page is not a record that a specific candidate saw it ten business days before the tool ran.
- Audit older than a year. Local Law 144 requires the audit within a year before use. A tool still in use eighteen months after its last audit is out of compliance on the day the year ends.
- Colorado treated as already in force. Nothing in SB 26-189 applies before 1 January 2027. Claiming compliance with it today invites the question of what the claim rests on.
Related
Last reviewed September 4, 2026. This reference summarises publicly available regulatory guidance and is provided for general information. It is not legal advice. Obligations depend on an institution's charter, registration status, size, and activities. Verify against the primary sources cited above and consult counsel before relying on any summary here.