# Illinois HB 3773 (P.A. 103-0804): Illinois Human Rights Act amendments on artificial intelligence in employment (H.B. 3773, Public Act 103-0804)

Source: https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773
Last updated: Oct 5, 2026

Illinois H.B. 3773, Public Act 103-0804, approved August 9, 2024 and effective January 1, 2026, amends the Illinois Human Rights Act to regulate artificial intelligence in employment. New Section 2-102(L) makes it a civil rights violation for an employer to use AI that has the effect of subjecting employees to discrimination on the basis of a protected class, to use zip codes as a proxy for protected classes, or to fail to notify an employee that it is using AI for those employment purposes. Because the discrimination test turns on effect, no discriminatory intent is required. The Illinois Department of Human Rights must write rules on when and how notice is given; it published proposed rules on May 15, 2026, but none are codified in 56 Ill. Adm. Code 2520 as of October 5, 2026, so the statutory duties apply without rule-level detail. For a bank this is an HR and vendor-management rule for Illinois employees and applicants, not a lending rule.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) |
| Type | Statute |
| Status | In force |
| Published | Aug 9, 2024 |
| Effective | Jan 1, 2026 |
| Applies to | Employers under the Illinois Human Rights Act — any person employing one or more employees within Illinois during 20 or more calendar weeks in the calendar year of or preceding the alleged violation, or any employer for disability, pregnancy and sexual-harassment claims. Banks are covered as employers using AI in recruitment, hiring, promotion, renewal of employment, selection for training, discharge, discipline, tenure, or the terms, privileges or conditions of employment. The Act does not cover AI used in lending decisions |
| Official text | https://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=103-0804 |

## Key points

- Section 2-101(M): 'artificial intelligence' means 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; it includes generative AI. Section 2-101(N) defines generative AI as an automated computing system that, when prompted with human prompts, descriptions or queries, can produce outputs that simulate human-produced content (text, images, multimedia and other content).
- Section 2-102(L)(1): with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges or conditions of employment, it is a civil rights violation for an employer to use AI that has the effect of subjecting employees to discrimination on the basis of protected classes under the Article.
- Section 2-102(L)(1) also makes it a violation to use zip codes as a proxy for protected classes under the Article.
- Section 2-102(L)(2): it is a civil rights violation for an employer to fail to provide notice to an employee that the employer is using AI for the purposes described in paragraph (1). The Department must adopt rules necessary for implementation and enforcement, including rules on the circumstances and conditions that require notice, the time period for providing notice, and the means for providing notice.
- Section 99: the Act takes effect January 1, 2026. The Public Act amends only Sections 2-101 and 2-102 of the Illinois Human Rights Act.
- Enforcement follows the Act's charge procedure: a charge in writing under oath may be filed with the Department within two years after the alleged violation (775 ILCS 5/7A-102(A)(1)); the Department investigates, and the complainant may proceed before the Illinois Human Rights Commission or in circuit court as the Act provides.
- Rulemaking: the Department of Human Rights published proposed amendments to 56 Ill. Adm. Code 2520 in the Illinois Register on May 15, 2026 (Volume 50, Issue 20, page 6794) and noticed a public hearing for June 10, 2026; the codified Part 2520 reviewed on October 5, 2026 contains no AI subpart.
- Related Illinois rule: the Artificial Intelligence Video Interview Act (820 ILCS 42) separately requires notice, explanation and consent before AI analysis of applicant video interviews.

## What changed for banks

Before HB 3773, AI-driven employment discrimination in Illinois was reached only through the Human Rights Act's general prohibitions. The amendment names AI explicitly, adopts an effects test that needs no proof of intent, bars zip-code proxies and creates a standalone notice violation. For banks with Illinois staff it means HR technology — résumé screening, video interview scoring, promotion analytics, performance monitoring — has to be inventoried, tested for disparate effects, and disclosed to employees, with the notice format still awaiting final rules.

## Use cases it governs

- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Fair lending & discrimination](https://www.bankingnewsai.com/ai-regulation/by-use-case#fair-lending)
- [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)

## What does Illinois HB 3773 require of banks as employers?

Illinois HB 3773 (Public Act 103-0804), effective January 1, 2026, adds Section 2-102(L) to the Illinois Human Rights Act and imposes three duties on any employer, including a bank, that uses artificial intelligence in employment decisions. First, it may not use AI that has the effect of subjecting employees to discrimination on the basis of a protected class, so intent is not an element. Second, it may not use zip codes as a proxy for protected classes. Third, it must notify an employee that it is using AI for recruitment, hiring, promotion, renewal of employment, selection for training, discharge, discipline, tenure, or the terms, privileges or conditions of employment. The Illinois Department of Human Rights is required to adopt rules on the circumstances, timing and means of notice; it proposed rules on May 15, 2026, but none are codified. The Act regulates AI in employment, not in lending.

| Rule | Authority | What it requires | Status | Source |
| --- | --- | --- | --- | --- |
| Section 2-101(M)–(N) — Definitions of AI and generative AI | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | AI is a machine-based system that infers from inputs how to generate predictions, content, recommendations or decisions that can influence environments; it includes generative AI that produces outputs simulating human-produced content. | From January 1, 2026 | [Illinois HB 3773 (P.A. 103-0804)](https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773) |
| Section 2-102(L)(1) — Discriminatory effect | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | An employer may not use AI that has the effect of subjecting employees to discrimination on the basis of protected classes in recruitment, hiring, promotion, renewal, training selection, discharge, discipline, tenure or terms and conditions of employment. | From January 1, 2026 | [Illinois HB 3773 (P.A. 103-0804)](https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773) |
| Section 2-102(L)(1) — Zip-code proxies | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | An employer may not use zip codes as a proxy for protected classes under the Article. | From January 1, 2026 | [Illinois HB 3773 (P.A. 103-0804)](https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773) |
| Section 2-102(L)(2) — Notice to employees | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | An employer must notify an employee that it is using AI for the employment purposes in paragraph (1); failure to do so is itself a civil rights violation. | From January 1, 2026 | [Illinois HB 3773 (P.A. 103-0804)](https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773) |
| Section 2-102(L)(2) — Department rulemaking | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | The Department of Human Rights shall adopt rules on the circumstances and conditions that require notice, the time period for providing notice and the means; proposed amendments to 56 Ill. Adm. Code 2520 appeared in the Illinois Register on May 15, 2026. | Proposed May 15, 2026; not final as of October 5, 2026 | [official text](https://www.ilsos.gov/content/dam/departments/index/register/volume50/register_volume50_20.pdf) |
| Section 2-101(B)(1)(a) — Who is an employer | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | Any person employing one or more employees within Illinois during 20 or more calendar weeks within the calendar year of or preceding the alleged violation; one or more employees suffices for disability, pregnancy and sexual-harassment claims. | Applies to Section 2-102(L) | [Illinois HB 3773 (P.A. 103-0804)](https://www.bankingnewsai.com/ai-regulation/documents/il-hb-3773) |
| 775 ILCS 5/7A-102(A)(1) — Charge procedure | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | A charge under oath may be filed with the Department within 2 years after the alleged civil rights violation, starting the investigation process that can lead to the Human Rights Commission or a court. | From January 1, 2026 for violations of Section 2-102(L) | [official text](https://www.ilga.gov/legislation/ilcs/documents/077500050K7A-102.htm) |
| 820 ILCS 42 — Artificial Intelligence Video Interview Act | [Illinois IDHR](https://www.bankingnewsai.com/ai-regulation/illinois) | Separate notice, explanation and consent requirements before AI analysis of applicant-submitted video interviews, plus demographic reporting where AI alone decides who is interviewed. | In force since January 1, 2020 | [Illinois AI Video Interview Act (820 ILCS 42)](https://www.bankingnewsai.com/ai-regulation/documents/il-ai-video-interview-act) |

HB 3773 is the effects-based counterpart to intent-based statutes such as Texas's TRAIGA. An employer does not need to intend discrimination: if an AI tool used in hiring or promotion subjects employees to discrimination on a protected basis, Section 2-102(L)(1) is violated. This matches the logic of disparate-impact analysis under Title VII, and the statute leaves the tool's maker out; the duty falls on the employer using the tool, so a bank cannot rely on a vendor's assurance alone. The zip-code rule closes the most common proxy route to the same result.

The notice duty is the part still waiting for detail. The Department of Human Rights was told to adopt rules on when, how and how far in advance to notify, and its May 15, 2026 proposal in the Illinois Register was its first step. Until final rules are codified, the safe course is notice that identifies the AI tools in use for each decision type, delivered before use and in a form employees can find again, such as a handbook section or an HR portal notice. The notice duty in the text is owed to 'an employee'; whether the Department's rules extend it to applicants is open.

The Act sits alongside, not in place of, other regimes. New York City's Local Law 144 requires bias audits for hiring tools, the California Civil Rights Council's regulations cover automated decision systems in employment, and Employers with staff in several states face parallel rules. A multistate bank's HR-AI program should treat Illinois as requiring an inventory of AI used in employment, disparate-effect testing, and a documented notice process, and should keep the Video Interview Act's consent and reporting steps for any recorded-video screening.

### What this means in practice

- Inventory every tool used in recruitment, hiring, promotion, discipline and termination decisions for Illinois staff, including vendor platforms and embedded features such as résumé ranking and video-interview scoring.
- Test each tool for discriminatory effect by protected class, and document the testing; Section 2-102(L)(1) is effects-based, so absence of intent is not a defense.
- Remove or justify zip-code and similar geographic variables in employment models, since zip codes may not be used as a proxy for protected classes.
- Issue an AI-use notice to Illinois employees now, covering the tools and the decisions they inform, rather than waiting for final Department rules; revisit it when the rules are adopted.
- Put contractual duties on HR-tech vendors for bias testing data, change notices and cooperation with an IDHR charge; the employer bears the statutory liability.
- Keep a litigation-ready record: charges can be filed within two years of an alleged violation (775 ILCS 5/7A-102(A)(1)), so retain model versions, test results and notices for at least that long.

## FAQ

### Does Illinois HB 3773 apply to banks?

Yes, to a bank as an employer. Section 2-102(L) of the Illinois Human Rights Act applies to employers as defined in Section 2-101(B), including any person employing one or more employees in Illinois for 20 or more calendar weeks in a year. It covers AI used in hiring, promotion, discharge, discipline and terms of employment, not AI used in lending or customer service.

### When does Illinois HB 3773 take effect?

Public Act 103-0804 was approved on August 9, 2024 and took effect January 1, 2026 (Section 99). The notice and discrimination provisions apply from that date; the Department of Human Rights' implementing rules had not been finalized as of October 5, 2026.

### What does an employer have to tell employees about AI under HB 3773?

Section 2-102(L)(2) requires notice to employees that the employer is using AI for recruitment, hiring, promotion, renewal, training selection, discharge, discipline, tenure or the terms and conditions of employment. The Department of Human Rights is to adopt rules on when notice is required, the time period and the means; those rules were only proposed (May 15, 2026) as of October 5, 2026.

### What are the penalties under Illinois HB 3773?

The Act creates no separate penalty schedule: a violation of Section 2-102(L) is a civil rights violation handled through the Human Rights Act's charge process, with the remedies the Act provides for civil rights violations, which are determined by the Illinois Human Rights Commission or a court after a charge filed with the Department within two years.

### How does Illinois HB 3773 compare with NYC Local Law 144?

NYC Local Law 144 requires an annual independent bias audit, a public summary and 10 business days' notice for automated employment decision tools in New York City hiring, with civil penalties enforced by DCWP. Illinois HB 3773 sets no audit requirement but applies an effects-based discrimination test and a notice duty to all uses of AI in employment decisions, and is enforced through the Human Rights Act.

## Related documents

- [Illinois AI Video Interview Act (820 ILCS 42)](https://www.bankingnewsai.com/ai-regulation/documents/il-ai-video-interview-act) — Artificial Intelligence Video Interview Act (820 ILCS 42) (Aug 9, 2019)
- [SB 947](https://www.bankingnewsai.com/ai-regulation/documents/ca-sb-947-2026) — Employment: Automated Decision Systems (No Robo Bosses Act) (Sep 30, 2026)
- [Bailey: Frontier AI and the Question of Governance (Sep 2026)](https://www.bankingnewsai.com/ai-regulation/documents/boe-bailey-frontier-ai-governance-2026) — Frontier AI and the Question of Governance — Governor Andrew Bailey (Sep 30, 2026)
- [AB 1609](https://www.bankingnewsai.com/ai-regulation/documents/ca-ab-1609-2026) — Customer Service Chatbots (Right to Human Customer Service Act) (Sep 28, 2026)
- [Atkins remarks at Investor Advisory Committee (Sep 2026)](https://www.bankingnewsai.com/ai-regulation/documents/sec-atkins-iac-ai-disclosure-remarks-2026-09) — Remarks at the SEC Investor Advisory Committee Meeting on AI Technologies and the Public Markets Information Ecosystem (Sep 10, 2026)
- [FCA multi-firm review: Frontier AI and cyber resilience (Sep 2026)](https://www.bankingnewsai.com/ai-regulation/documents/fca-frontier-ai-cyber-resilience-2026) — Frontier AI and Cyber Resilience (Sep 2, 2026)
- [FSB Chair's letter to G20 (Aug 2026)](https://www.bankingnewsai.com/ai-regulation/documents/fsb-chair-letter-g20-august-2026) — FSB Chair's letter to G20 Finance Ministers and Central Bank Governors: August 2026 — risks arising from frontier artificial intelligence models (Aug 31, 2026)
- [Colorado AG proposed ADMT rules](https://www.bankingnewsai.com/ai-regulation/documents/co-ag-admt-proposed-rules-2026) — Proposed Automated Decision-Making Technology and Conversational AI Service Rules (Notice of Rulemaking Hearing) (Aug 11, 2026)

Last reviewed Oct 5, 2026. Cite the official text (https://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=103-0804) for the rule and this page for the summary and dates.

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