Illinois Unveils Draft Notice Rules on AI Use in Employment Ahead of Discrimination Ban

Quick Hits

• The Illinois Department of Human Rights unveiled draft rules for implementing Illinois’s new ban on AI discrimination in employment, clarifying potential notice and recordkeeping obligations for employers regarding their use of AI.
• The draft rules would apply broadly to all employers under the Illinois antidiscrimination law and would necessitate notice whenever AI is involved in covered employment decisions, regardless of whether it leads to unlawful discrimination.
• Under the draft rules, required notifications would need to include specific information such as the AI product’s name, the employment decisions it affects, its purpose, the data it collects, targeted job positions, and contact details for inquiries.

The draft rules, “Subpart J: Use of Artificial Intelligence in Employment,” implement changes to the Illinois Human Rights Act (IHRA) that were made under Illinois House Bill (HB) 3773, a 2024 law that prohibits the use of AI, including generative AI, in ways that discriminate against employees based on protected characteristics, even if such discrimination is unintentional. HB 3773 takes effect on January 1, 2026, and requires the IDHR to issue rules implementing the substantive requirements of the act.

The new draft rules, which were shared during a stakeholder meeting and have yet to be formally published for public comment, would clarify employers’ notice and recordkeeping requirements regarding their use of AI to make employment decisions.

Covered Entities

The draft rules apply broadly to “employers” under the IHRA and to their agents, including recruiters and other third parties acting on an employer’s behalf. The notice obligations would be triggered when an employer “uses” AI “to influence or facilitate” any “covered employment decision,” which includes 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 define “use” of AI broadly to include “any instance in which the output of an artificial intelligence system influences or facilitates a covered employment decision.” Covered AI is defined under HB 3773 to refer to a “machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs” such as predictions, recommendations, or decisions.

Notice Requirements

Under the draft rules, employers would be required to provide notice to employees and prospective employees when AI is used “to influence or facilitate” an employment decision, whether or not the use of AI “has the purpose or effect of subjecting employees to unlawful discrimination.”

The draft rules lay out a broad array of situations where AI is commonly used that would trigger an employer’s notice requirements, including “using computer-based assessments or tests” like puzzles or games to make predictions about an employee or prospective employee or measure the employee’s or prospective employee’s mental or physical skills or abilities or personalities or aptitudes or otherwise “screen, evaluate, categorize, and/or recommend prospective or current employees.”

Additionally, the draft rules would require notice if AI is used to direct job postings or advertisements to specific groups or populations, screen resumes, analyze facial expressions, word choice, and voice during online or video interviews, or analyze data acquired from third parties.

However, notice would not be required for AI used solely for nonemployment-decision business operations—such as generating marketing copy—or for ordinary software that does not infer or generate outputs affecting employment decisions (e.g., basic word processing, spreadsheets, firewalls, spam filtering), provided those tools are not used to infer or recommend employment outcomes. Likewise, if a system has AI features but the employer does not use those features for covered decisions, no notice would be required.

Content of the Notice

Employers would be required to provide specific and transparent content if notice is required. Employers would be required to disclose:

• the name of the AI product and its developer and vendor;
• the employment decisions the AI influences or facilitates (e.g., recruitment, hiring, discipline);
• the purpose of the AI system and the categories of personal information or employee data it collects or processes, with practical descriptions (e.g., summarizing or scoring resumes; analyzing video interviews; evaluating chat interactions with a recruiting bot);
• the types of job positions for which the AI will be used;
• a point of contact (e.g., Human Resources contact or hiring manager) for questions about the AI and its use;
• the right to request a reasonable accommodation and how to request it; and
• required statutory language.

Notices would need to be written plainly, made available in the languages commonly spoken in the workforce, and reasonably accessible to employees with disabilities.

Timing and Manner of Notice

Employers would need to provide notice to current employees annually or within thirty days of the “adoption of a new or substantially updated” AI system. For prospective employees, the notice of AI use would need to be included in any job posting.

The draft rules would mandate notice in various forms, anticipating modern physical and digital work environments, as well as consistency across typical communication channels with employees and prospective employees. Notices would be required to be posted in (1) employee handbooks or manuals; (2) in a “conspicuous location” on the employer’s physical premises where notices are usually posted; (3) in a “conspicuous location” on the employer’s intranet or external website; and (4) in any job notice or posting.

Recordkeeping Requirements

The draft rules would further extend recordkeeping requirements to the use of AI, requiring employers to preserve notices, postings, and disclosures regarding AI and “records of such use” for a period of four years. The draft regulations would also increase multiple existing retention periods to four years and require employers to preserve all relevant records until a charge is adjudicated, regardless of when it is filed.

Expanding AI Regulation

The IDHR draft rules represent another step in AI regulation in Illinois, which effective January 1, 2026 joins other jurisdictions, such as California, Colorado, and New York City, in implementing protections for employees regarding the growing use of AI technology, though California Governor Gavin Newsom vetoed a bill in October 2025 that would have broadly required employers to provide notice when they use AI. Notably, in addition to the notice provisions of the new law, which are specifically addressed in the draft rules, the Illinois law expressly makes it unlawful for employers to use AI in ways that discriminate against employees or prospective employees, regardless of whether the discrimination was intentional.

Additional state and local regulations on the use and impact of AI technology are anticipated, as the federal government has backed off on regulation. However, President Donald Trump recently signed an executive order restricting states and localities from issuing new laws or regulations related to AI and asserting federal preemption over the space. The order is explicitly aimed at limiting regulation to promote the growth of the industry in the United States.

Next Steps

Depending on feedback the IDHR might receive, it is possible, though unlikely, that the draft rules could be changed significantly before being published in the Illinois Register and opened for a public comment period. Either way, the draft rules provide insight into how the IDHR proposes to address the implementation of the notice provisions of HB 3773.

As such, employers in Illinois may want to take note of the new draft rules and may want to review their use of AI tools and identify whether and how the use of these tools affects employment decisions. While the HB 3773 does not require formal bias or impact assessments, like the New York City and Colorado AI laws, proactive assessments may be useful in revealing whether an employee’s use of AI has the effect of discriminatory outcomes, even if such outcomes are unintentional. Furthermore, employers may want to start preparing for compliance with the notice requirements, including drafting potential notices and implementing procedures for providing the notice in accordance with the new requirements.

Ogletree Deakins’ Chicago office, Cybersecurity and Privacy Practice Group, Technology Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Cybersecurity and Privacy, Employment Law, Illinois, Technology, and Workforce Analytics and Compliance blogs as additional information becomes available.

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