AI Hiring in Illinois: When Automated Screening Becomes a Legal Problem

One of the risks of automated hiring is that an applicant that interviewed with your company may sue you.

An automatic hiring goes like this: a company receives 600 applications, its recruiting software ranks them, and HR interviews the top 25. Nobody at the company reviews the other 575 résumés.

Now suppose the software consistently ranks older applicants lower. Then the company may have a discrimination problem, even if nobody intended to discriminate. And saying the software made the decision won't necessarily help.

Illinois Now Regulates AI in Employment Decisions Directly

Effective January 1, 2026, Illinois amended its Human Rights Act to expressly prohibit employers from using AI in employment decisions when it has the effect of discriminating against protected groups.

The law covers hiring, promotions, discipline, termination, and other employment decisions. It also prohibits using ZIP codes as a substitute for protected characteristics, such as race.

Importantly, the statute focuses on the effect of using AI, not simply whether the employer intended to discriminate. It applies broadly, including to employers with as few as one Illinois employee who meet the Act's coverage requirements.

Nor does the software have to make the final decision. Illinois defines AI broadly enough to include systems that generate predictions, recommendations, or decisions, including generative AI. Under this definition, a résumé-ranking tool that merely recommends which applicants deserve an interview may therefore be enough to implicate the law.

The Notice Requirement Is Still Settled

Illinois also requires employers to disclose certain uses of AI in employment decisions. The issue, however, is that the statute expressly refers to notifying employees, while proposed regulations would have extended the requirement to job applicants.

The Illinois Department of Human Rights published proposed rules in May 2026, then postponed them in June. The rules would have covered AI used to influence or assist employment decisions, not just systems making final decisions.

The statutory notice obligation remains in effect, but employers still lack final guidance on its precise scope and timing. For now, providing clear notice to both employees and applicants, and preserving proof of that notice, is a sensible precaution.

Using a Vendor’s Tool Does Not Shift the Responsibility

Many employers rely on recruiting platforms rather than building their own systems. Under the Illinois amendment, however, the obligation still rests on the employer that uses the tool.

Federal litigation points the same way. In Mobley v. Workday, Inc., No. 3:23-cv-00770 (N.D. Cal.), a job applicant alleged that Workday’s AI screening tools disadvantaged older, Black, and disabled applicants. In July 2024, the federal court in California allowed claims to proceed against Workday on the theory that employers had delegated traditional hiring functions to its tools, making Workday their agent.

The case has since grown. In May 2025, the court preliminarily certified a nationwide collective of applicants age 40 and older under the Age Discrimination in Employment Act. Workday has said the case lacks merit, and the rulings so far are preliminary.

The case does not establish Illinois law. But it illustrates a broader problem: outsourcing a hiring function does not necessarily outsource responsibility for what that function does.

An employer facing a claim may need to explain how applicants were scored, what information the system considered, and why certain applicants were rejected. Those answers may be sitting with the vendor.

A contractual indemnity provision may help allocate the resulting costs with the vendor. However, it won't prevent an applicant from filing a lawsuit.

Video Interviews Carry Additional Obligations

Illinois already had a separate law governing AI-assisted video interviews. Under the Artificial Intelligence Video Interview Act, employers using AI to analyze video interviews for Illinois-based positions must notify applicants beforehand, explain the technology and the characteristics evaluated, and obtain consent.

Applicants can request deletion of their videos, which generally must occur within 30 days. Employers relying exclusively on AI analysis to select candidates for in-person interviews also face annual demographic reporting requirements.

And where a system collects biometric identifiers, such as facial geometry scans or voiceprints, Illinois’s Biometric Information Privacy Act may impose additional notice, consent, and retention obligations.

How Claims Are Brought

A rejected applicant doesn't establish discrimination merely by showing that AI was used. But if the applicant can demonstrate that the screening process disproportionately excluded a protected group, the employer may have to defend the criteria the software applied and explain their relationship to the job.

Discrimination claims under the Illinois Human Rights Act generally begin with the Department of Human Rights and may proceed to the Human Rights Commission or, after the required procedures, Illinois circuit court. Available remedies can include damages, backpay, and attorney fees.

By then, however, the practical problem may be evidence. Does the employer have the rejected applications, scoring records, vendor documentation, and information needed to evaluate the alleged disparity?

Employers also need to consider their duty to preserve that evidence. Federal law already requires covered employers to retain hiring records for specified periods, generally at least one year. Once a discrimination charge is filed, additional preservation obligations may apply. And when litigation is reasonably anticipated, employers should assess whether a litigation hold is necessary to prevent relevant electronic records from being deleted, including records held by recruiting vendors.

That can be harder than it sounds. Some systems automatically delete applicant information, overwrite scoring data, or change how candidates are evaluated when the software is updated. An employer that fails to preserve relevant information may face sanctions or other consequences, depending on the circumstances.

Before the next hiring cycle, employers should determine where AI enters their recruitment process, what testing the vendor has performed, and whether the contract provides access to relevant records and assistance in defending claims. They should also understand what the vendor retains, for how long, and whether it can suspend deletion when a dispute arises. Human review should be meaningful, not simply approval of an automated ranking.

If your business uses AI in hiring or employment decisions, we can help you assess your obligations and respond to claims. Contact us to discuss your matter.

This article provides general information and does not constitute legal advice. For guidance concerning a specific matter, see our AI-related litigation practice. Rights and obligations depend on the relevant circumstances and applicable law. To discuss potential representation, schedule a consultation. Submitting an inquiry does not establish an attorney-client relationship.