Illinois HB 3773 runs to a few hundred words, and most of the compliance argument now happening in HR and legal teams is about words the statute never used. Reading the enacted text closely separates what an employer can be sure of from what nobody can be sure of yet.
HB 3773 settles four duties: an effects standard, a flat ban on zip code proxies, a notice duty, and the ordinary remedies of the Illinois Human Rights Act. Four questions are open, because the statute is silent and the implementing rules were withdrawn in June 2026. Below, each settled duty is quoted from the text, and each open question is answered the way a careful employer should answer it until the Illinois Department of Human Rights (IDHR) says otherwise.
Settled: the operative words of HB 3773, quoted in full
Approved on 9 August 2024, Public Act 103-0804 has applied since 1 January 2026. The act amended sections 2-101 and 2-102 of the Illinois Human Rights Act, and subsection (L) of section 2-102 reads:
(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, for an employer to use artificial intelligence that has the effect of subjecting employees to discrimination on the basis of protected classes under this Article or to use zip codes as a proxy for protected classes under this Article. (2) For an employer to fail to provide notice to an employee that the employer is using artificial intelligence for the purposes described in paragraph (1).
A third sentence directs IDHR to adopt rules “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”. Two definitions arrived with it.
Artificial intelligence is “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”, the OECD’s 2023 wording. Generative artificial intelligence is defined separately as a system that “when prompted with human prompts, descriptions, or queries, can produce outputs that simulate human-produced content”.
HB 3773 scope follows from those definitions rather than from any list of tools. A résumé parser, a ranking model, an interview scoring product and a large language model summarising candidates all infer outputs from input, so all four are in scope when used with respect to a listed decision.
Settled: which employers HB 3773 binds, and which duties stay with the vendor
Coverage under HB 3773 is narrower than “any employer with one employee” summaries suggest. IDHR states that for most discrimination claims “the employer must have had at least 1 employee for each working day in 20 or more calendar weeks in the current or preceding year”, with sexual harassment and pregnancy claims covered from the first employee.
HB 3773 measures geography by where the work happens. The act defines an employee as someone performing services for remuneration within Illinois, so a company headquartered in another state is covered for its Illinois-based staff and for roles based in Illinois, whether or not it has premises there.
Vendor arrangements do not move the duty. HB 3773 binds the employer that uses the tool, and a purchase contract can shift cost and cooperation without shifting liability under the act. Illinois biometric law works the other way: in Deyerler v. HireVue, No. 22 CV 1284, Judge Jeremy C.
Daniel of the Northern District of Illinois allowed claims under the Biometric Information Privacy Act to proceed against the interview software vendor itself on 26 February 2024, dismissing only the claims under section 15(c). One hiring stack can therefore produce employer liability under HB 3773 and vendor liability under biometric law from the same recorded interview.
Settled: what a complainant can do, and what it costs to lose
An HB 3773 charge runs through ordinary Human Rights Act machinery. A complainant has two years from the alleged violation to file with IDHR, extended from 300 days by Public Act 103-0973 with effect from 1 January 2025, after which the case can proceed to the Illinois Human Rights Commission or to circuit court.
HB 3773 penalties are capped but multiply. Section 8A-104(K) allows a civil penalty per violation and for each aggrieved party injured by the violation, not exceeding $16,000 where no prior violation has been adjudged, $42,500 with one prior violation in the five years before the charge, and $70,000 with two or more in the preceding seven years. Penalties sit alongside actual damages, back pay, reinstatement and attorneys’ fees.
Protected classes for an HB 3773 claim are broad, which widens what such a claim can be built on. IDHR lists race, colour, ancestry, national origin, disability, religion, sex, sexual orientation including gender identity, age over 40, marital status, pregnancy, reproductive health decisions, family responsibilities, military status, unfavourable military discharge, citizenship status, work authorization status, order of protection status, language, arrest record and, with limits, conviction record. Family responsibilities and reproductive health decisions were added from 1 January 2025, which matters for any model that reads employment gaps as a negative signal.
Open question one: does “employee” in HB 3773 include a job applicant?
Definitional text in HB 3773 points one way and the list of covered decisions points the other. The Human Rights Act defines “employee” as a person performing services for remuneration within Illinois, plus apprentices and applicants for apprenticeship, and does not name applicants for employment. Paragraph (1), though, opens with recruitment and hiring, and paragraph (2) ties the notice duty to “an employee”.
Regulators read it broadly. IDHR’s proposed rules would have required notice in job postings, which only makes sense if candidates are entitled to it, and the Association of Corporate Counsel’s guide to the law treats applicants as covered.
The conservative answer is to notify applicants and candidates as well as staff. A published notice costs little, and an employer arguing in 2027 that applicants were outside the statute will be arguing against the regulator’s own draft.
Open question two: what proof does “has the effect of” demand?
Nothing in HB 3773 names a metric, a threshold or a test. The statute asks whether use of the tool has the effect of subjecting people to discrimination, with no intent element, no audit requirement and no safe harbour for employers who test.
HB 3773 leaves the arithmetic to federal practice. Selection rates, impact ratios and significance tests are how adverse effect is measured everywhere else, and our bias audit methodology guide sets out the calculations and the errors auditors make with them. Federal agencies spent 2026 withdrawing the four-fifths rule from their own regulations, which changes federal enforcement and changes nothing in Illinois: subsection (L) never referenced it.
Measuring is still the only way to know. An employer that runs impact ratios each quarter can show a regulator what it found and what it changed; one that runs nothing has no answer except that it never looked, which is not a defence to an effects standard.
Open question three: when does a location feature become a zip code “proxy”?
Paragraph (1) of HB 3773 bans zip codes as a proxy without any effects qualifier, and defines neither “zip code” nor “proxy”. Geography carries demographic signal in Illinois with unusual force: Brown University’s analysis of the 2020 census puts the Chicago metropolitan area’s Black-white dissimilarity index at 73.8, fifth among the 50 metros with the largest Black populations, and reports that the average Black resident lives in a census tract that is 62.8% Black.
Removing the field is not the same as removing the signal. Commute distance, “local candidate” flags, location-based pay bands and neighbourhood names in free text all reconstruct it, and a language model scoring résumés can read school, employer and address text without any structured zip code input.
Research on text screening shows how readily such signals attach to outcomes: Kyra Wilson and Aylin Caliskan of the University of Washington varied only names across more than 500 résumés and found embedding models “significantly favoring White-associated names in 85.1% of cases”.
Write down the test you applied. A defensible file lists every location-derived feature in each model, states the job-related reason for keeping it, and records the check that the feature does not track a protected class in your applicant pool.
Open question four: what notice satisfies paragraph (2) with no rules in force?
The HB 3773 notice duty has bound employers since 1 January 2026, and no rule tells them how to discharge it. IDHR circulated a draft to stakeholders in December 2025 and published a proposal in the Illinois Register on 15 May 2026 with comments due by 29 June.
HB 3773 notice has no better template than that proposal. Notice would have named the AI developer, vendor and product; the employment decisions affected; the purpose of the system and the categories of employee data it processes; the job positions involved; a contact for questions; and how to request a reasonable accommodation.
Notice was to be given within 30 days of adopting a new or substantially updated system, written in plain language, translated for the languages of the workforce and made accessible to people with disabilities. Section 2520.110 would have extended record retention from one year to three, including records of AI notices and postings, and AI used solely to generate job postings was exempt.
Then the proposal came off the table. IDHR postponed it in early June 2026, “to allow for continued collaboration with other state agencies”, cancelling the scheduled hearing; alerts date the announcement to 2 June and to 10 June, and the formal withdrawal followed later that month. Nothing has replaced it as of 23 September 2026.
Awareness has not caught up either. SHRM’s State of AI in HR research for 2026, drawing on more than 1,900 HR professionals, found that “57% of HR professionals in states with workforce-related AI regulations are not aware of those rules”.
Two older Illinois statutes still bind the same hiring process
Video interviews carry their own regime alongside HB 3773. The Artificial Intelligence Video Interview Act has applied since 1 January 2020 to positions based in Illinois, and requires an employer to tell each applicant before the interview that AI may analyse it, to explain “how the artificial intelligence works and what general types of characteristics it uses to evaluate applicants”, and to obtain consent. Recordings must be destroyed within 30 days of a request, including copies held by vendors.
Reporting was added from 1 January 2022. An employer that relies solely on AI analysis of a video interview to decide who gets an in-person interview must report the race and ethnicity of applicants who were and were not advanced to the Department of Commerce and Economic Opportunity annually by 31 December, covering the 12 months ending 30 November, and the department must report to the Governor and General Assembly by 1 July each year whether that data discloses racial bias in the use of AI.
Biometric law raises the financial stakes. The Biometric Information Privacy Act carries a private right of action with liquidated damages of $1,000 per negligent violation and $5,000 per intentional or reckless one, which is why the Deyerler claims against a vendor matter more, in cash terms, than most Human Rights Act charges.
Federal pressure has not reached Illinois, and Illinois kept legislating
Executive Order 14365, signed on 11 December 2025, directed a Justice Department litigation task force to challenge state AI laws the administration considers inconsistent with federal policy. Its one court action by mid-2026 was intervening on 24 April 2026 in xAI’s challenge to Colorado’s algorithmic discrimination law, and no federal case has been filed against the Illinois statute.
State-level activity moved in the other direction. Governor JB Pritzker signed Senate Bill 315, the Artificial Intelligence Safety Measures Act, on 6 July 2026, which regulates large frontier model developers rather than employers and leaves subsection (L) untouched. A broader proposal, the Preventing Algorithmic Discrimination Act introduced as Senate Bill 2203 in February 2025, did not pass.
The file that answers each question
| Question | Where the answer must come from | Record to hold |
| Is this tool in scope? | Definitions in section 2-101 | Inventory entry naming vendor, product, model type and decisions it touches |
| Are applicants covered? | Open; draft rules assume yes | Notice published to candidates as well as employees |
| Does use have a discriminatory effect? | Open; no statutory metric | Selection rates, impact ratios, significance tests, dated |
| Is a location feature a proxy? | Open; no definition | Feature list with job-related reason and proxy check |
| Was notice given? | Paragraph (2), no rules in force | Dated notice with the six proposed elements, translations, posting locations |
| Was the video interview lawful? | AI Video Interview Act | Consent record, explanation text, deletion log, DCEO report |
| Can the file be produced two years later? | Two-year charge window | Retention of all of the above, three years to match the proposed rule |
Govern365.ai keeps that HB 3773 file standing rather than assembled after a charge arrives. Every model in the hiring stack sits once in an AI system inventory, with its vendor, the decisions it touches, its Illinois duties and the date of each test result, notice and consent record attached to it, so a two-year-old requisition can be reconstructed from records rather than memory.
Because the same entries map to New York City’s Local Law 144, California’s automated-decision system rules and the EU AI Act, an employer that answers Illinois well is most of the way to answering the rest. For how Illinois compares with jurisdictions that do require an audit, see AI bias audit: what each law actually requires.
Frequently Asked Questions
What does Illinois HB 3773 prohibit?
Using artificial intelligence that has the effect of discriminating against employees on a protected basis, using zip codes as a proxy for a protected class, and failing to give notice that AI is being used for a covered employment decision.
Which employers does HB 3773 cover?
Employers with at least one employee for each working day in 20 or more calendar weeks in the current or preceding year, measured by employees performing services in Illinois. Sexual harassment and pregnancy claims are covered from the first employee.
Does HB 3773 apply to a company based outside Illinois?
Yes, where employees perform services in Illinois. No physical premises in the state are required.
Does HB 3773 protect job applicants?
The text ties both duties to “employees”, while listing recruitment and hiring among covered decisions, and the withdrawn IDHR rules would have required notice in job postings. Treat applicants as covered.
Does HB 3773 require a bias audit?
No. No audit or impact assessment is mandated, and no safe harbour is offered to employers who test. A discriminatory effect is a violation whether or not it was measured.
Is using zip codes ever allowed under HB 3773?
Using zip codes as a proxy for protected classes is prohibited outright. Location data used for a documented, job-related purpose is a different question, which is why the purpose and the proxy check should be written down.
Does HB 3773 cover ChatGPT and other generative AI?
Yes. Generative artificial intelligence is defined separately in the amended act, so a language model that screens, ranks, summarises or drafts assessments for a covered decision is within scope.
What must an AI notice say in Illinois?
No rule is in force. The May 2026 proposal listed the developer, vendor and product; the decisions affected; the purpose and data categories; the job positions; a contact; and reasonable accommodation information, in plain language and in the languages of the workforce.
Are the IDHR AI rules in force?
No. A draft circulated in December 2025 and a proposal appeared on 15 May 2026. IDHR postponed that proposal in early June to work with other state agencies. The statutory duties apply regardless.
What are the penalties under HB 3773?
Actual damages, back pay, reinstatement and attorneys’ fees, plus civil penalties per violation and per aggrieved party capped at $16,000, $42,500 or $70,000 depending on prior violations.
How long does an employee have to bring an HB 3773 claim?
Two years from the alleged violation, under the Human Rights Act as amended from 1 January 2025.
How does HB 3773 interact with the AI Video Interview Act and BIPA?
The amendment governs any AI use in covered employment decisions and binds the employer. The video interview act adds consent, explanation, deletion and demographic reporting duties for AI-analysed interviews, and biometric law can reach the software vendor directly with liquidated damages.
