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L2 · Fair and compliant AI in hiring and employee decisions9 min read

AI hiring laws in the U.S.: what's legal where

In the U.S., existing anti-discrimination law applies to AI hiring tools, and a growing number of cities and states add AI-specific rules. These are the ones every CHRO hiring in the U.S. should know. (Laws change often; check the compliance tracker and your counsel.)

Everywhere: discrimination law still applies

Using AI does not change the rules on age, sex, race, disability and other protected characteristics. The EEOC's iTutorGroup settlement (2023) concerned software that rejected older applicants.

New York City: Local Law 144

For automated employment decision tools used for candidates or employees in NYC:

  • the tool must have had a bias audit within one year before use;
  • a summary of the audit results must be publicly available;
  • candidates must get notice 10 business days before the tool is used.

The city's Department of Consumer and Worker Protection (DCWP) began enforcing on July 5, 2023.

Illinois

  • Artificial Intelligence Video Interview Act (in force since 2020): if AI analyzes video interviews, employers must notify applicants, explain how the AI works and what characteristics it evaluates, and obtain consent before the interview; videos must be deleted within 30 days of an applicant's request.
  • Human Rights Act amendment (HB 3773), effective January 1, 2026: employers may not use AI that has a discriminatory effect in recruitment, hiring, promotion, discipline, discharge and other terms of employment, may not use zip codes as a proxy for protected classes, and must give notice when using AI for these decisions.

Elsewhere

Other states have passed or are debating AI rules for employment decisions, and dates move. Track them centrally rather than team by team.

Enforcement is getting sharper

A December 2025 audit by the New York State Comptroller called enforcement of Local Law 144 ineffective: DCWP reviewed 32 employers' and vendors' websites and found one instance of likely non-compliance, while the Comptroller's auditors found 17 potential instances among the same companies. DCWP agreed to most of the 13 recommendations — expect more scrutiny.

What this means for the CHRO

Build a location-to-law map for your hiring: where you hire, which tools you use there, and which rules apply. Give one person ownership and review it every quarter.

The cheapest compliance is design: notices in the application flow, consent for video analysis, yearly bias audits from vendors, and a human decision for every rejection.

Remember that rules follow the candidate's or employee's location, not only your headquarters. Remote hiring can bring NYC, Illinois or EU rules into scope even if you have no office there. Check notice wording with counsel, keep evidence of notices and consents, and make sure vendors can produce audit summaries when asked.

Real example

In December 2025 the New York State Comptroller published an audit of NYC Local Law 144 enforcement: DCWP reviewed 32 employers' and vendors' websites and identified one instance of likely non-compliance, while the Comptroller's auditors found 17 instances of potential non-compliance at the same companies; the audit made 13 recommendations, most of which DCWP agreed to implement. Source: Office of the New York State Comptroller — DiNapoli: New Yorkers deserve transparent hiring process when AI is used (audit of LL144 enforcement, Dec 2025) ↗

Use it

Quick check · 3 questions

  1. 1.Under NYC Local Law 144, how much notice must candidates get before an AEDT is used?

  2. 2.What does the Illinois AI Video Interview Act require before an AI-analyzed video interview?

  3. 3.What does Illinois HB 3773 prohibit from January 1, 2026?

0 of 3 answered

Sources

Last reviewed 2026-10-01.