Until recently, many HR departments treated AI hiring tools as a simple upgrade: faster résumé screening, automated rankings, and even video-interview analysis. California and Illinois are now warning employers that speed does not excuse discrimination. In California, the Civil Rights Council secured final approval on June 27, 2025 for regulations clarifying that existing anti-discrimination law applies to AI, algorithms, and other automated decision systems in employment, and those rules took effect on October 1, 2025. They make clear that an AI system can violate the law if it harms applicants or employees because of protected traits such as race, sex, or disability, require retention of relevant employment records including automated-decision data for at least four years, and state that AI-delivered tests, questions, puzzles, or games can count as unlawful disability-related inquiries when they are likely to elicit information about a disability. (calcivilrights.ca.gov)
California’s approach is especially striking because it reaches beyond the employer’s own HR team. In the rulemaking record, the state explains that an “agent” can include a third party acting on the employer’s behalf, including, in some circumstances, a vendor that creates or operates an automated decision system used for recruitment, screening, hiring, promotion, pay, benefits, or leave decisions. In practical terms, that means a company may not escape responsibility simply by saying, “The software made the decision.” (calcivilrights.ca.gov)
Illinois is moving in a parallel but slightly different direction. Public Act 103-0804, which took effect on January 1, 2026, amended the Illinois Human Rights Act so that using AI in recruitment, hiring, promotion, discipline, discharge, training, tenure, or other employment conditions is a civil-rights violation if the tool has the effect of causing discrimination or if ZIP code is used as a proxy for a protected class. The same law also requires notice when AI is used for those purposes, while leaving the Illinois Department of Human Rights to develop the detailed notice rules through rulemaking. (ilga.gov)
Illinois had already started earlier with the Artificial Intelligence Video Interview Act. Employers using AI to analyze recorded video interviews for Illinois-based jobs must notify applicants, explain in general terms how the AI works and what characteristics it evaluates, obtain consent, limit video sharing, and delete videos within 30 days if the applicant requests it. Employers that rely solely on AI video analysis to decide who gets an in-person interview must also report demographic data to the state each year, yet Illinois’s July 2025 report said no such data was reported for the period ending November 30, 2024. Together, California and Illinois are sending a clear message: in modern hiring, “smart” technology is not enough. It must also be transparent, accountable, and fair. (ilga.gov)










