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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On August 9, 2024, Illinois Governor Pritzker signed House Bill (HB) 3773 into law, amending the Illinois Human Rights Act to expressly prohibit the use of artificial intelligence in a manner that results in illegal discrimination in employment decisions and employee recruitment as defined under state law. The amendments to HB 3773 go into effect on January 1, 2026.

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HB 3773 regulates both traditional artificial intelligence, which has been in use for decades, and generative artificial intelligence. It defines artificial intelligence 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. Generative artificial intelligence, under HB 3773, is defined as an automated computing system which, when prompted with human prompts, descriptions, or queries, can produce outputs that simulate human-produced content, including, but not limited to, the following:

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HB 3773 prohibits the use of artificial intelligence by an employer in Illinois that has the effect of subjecting employees to unlawful discrimination based upon legally protected classes under state law or to use zip codes as a proxy for protected classes, “[w]ith respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.”  Furthermore, HB 3773 <em>also</em> mandates that employers must notify employees when using artificial intelligence for any of the purposes described above. Illinois’ Department of Human Rights is directed under HB 3773 to adopt rules “necessary for the implementation and enforcement of this subdivision, including, but not limited to, rules on the circumstances and conditions that require notice, the time period for providing notice, and the means for providing notice.”

This amendment to Illinois’ statute expressly prohibiting the use of artificial intelligence in such a manner that may have the effect of illegal discrimination as to employees, including the recruitment of employees, is consistent with the positions taken by the U.S. Department of Labor and other states, such as New York, as it relates to prohibiting employers’ use of artificial intelligence in a manner that may result in the discrimination against employees and applicants for employment based upon legally protected characteristics. The U.S. Department of Labor takes the position that such employers can be financially liable to such employees or applicants for employment if they are subject to discrimination by artificial intelligence because of legally protected characteristics. Federal law does not currently require employers to notify employees or job applicants that they intend to use artificial intelligence in employment decisions.

Although Illinois employers have until January 1, 2026, before HB 3773 takes effect, companies can begin integrating compliance into their technology stacks and employment-related processes now. The market is flooded with technology designed for employment-related decision-making throughout the employee life cycle, from recruitment to performance reviews to termination. Illinois employers must thoroughly assess which platforms and tools in their technology stack incorporate artificial intelligence, including generative artificial intelligence components and identify or create processes to evaluate, mitigate, and monitor potential discriminatory or biased impacts of such technology use. Note that the Illinois Department of Human Rights will provide further refinement through upcoming regulations.

<em>This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel. This document may be considered attorney advertising in some jurisdictions.</em> © 2024 THOMPSON HINE LLP. ALL RIGHTS RESERVED.

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Illinois Enacts State Laws Regulating AI Use in Employment

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