Employers use AI to screen resumes, schedule interviews and score candidates, and a patchwork of rules now governs it: New York City has required bias audits since July 2023, Illinois has barred discriminatory AI in employment since January 1, 2026, the EU has pushed its high-risk deadline for hiring systems to December 2, 2027, and Colorado replaced its AI law in May 2026. This guide explains where each rule stands as of October 26, 2026, flags what was delayed or changed, and ends with practical checklists. It is general information, not legal advice.
For a broader introduction to the technology and its bias risks, see our explainer on AI in hiring and HR.
How AI is used in hiring
Most large employers run an applicant tracking system, and many now layer AI on top. Common uses include parsing resumes and ranking them against a job description, matching candidates to open roles, chatbots that answer questions and book interviews, online assessments scored by software, and video interview tools that transcribe or analyze answers. Each of these can influence who reaches a human recruiter, which is why lawmakers treat them as consequential.
The legal concern is usually not that a tool exists but what it does: whether it substantially helps decide who is hired or promoted, whether it treats protected groups differently, and whether candidates are told. Our piece on algorithmic bias explains how skewed training data produces skewed outcomes.
New York City: Local Law 144
New York City’s Local Law 144 of 2021 covers automated employment decision tools. According to the city’s Department of Consumer and Worker Protection (DCWP), an employer or employment agency may use such a tool only if it has been subject to a bias audit within one year of use, information about the audit is publicly available, and required notices have been given to employees or candidates. DCWP began enforcing the law on July 5, 2023.
DCWP’s page says the notice must be provided 10 business days before the tool is used, and that people can file complaints if an employer used a tool without an audit, without posting results or without notices. The page does not describe penalties or audit methodology, so check the rule text for those details. This is the longest-running hiring-specific AI law in the United States.
European Union: high-risk, but later
The EU AI Act treats AI used in recruitment as high-risk. A Gibson Dunn summary lists recruitment tools among the Annex III high-risk categories, and the Act also covers other employment uses such as promotion and worker management; see our EU AI Act explainer for the full structure.
The date changed. High-risk duties for Annex III systems were due on August 2, 2026, but the Digital Omnibus on AI moved them. The European Commission’s AI Act Service Desk timeline now lists December 2, 2027 for Annex III systems and August 2, 2028 for AI embedded in regulated products. Secondary reports say the Omnibus was adopted as Regulation (EU) 2026/1744 in mid-2026; we could not open the Official Journal text, so confirm the final wording there. The ban on emotion recognition in the workplace is a separate prohibition that, per the timeline, has applied since the prohibitions began on February 2, 2025.
Illinois: in force, rules postponed
Illinois HB 3773 (Public Act 103-0804), signed on August 9, 2024, amends the Illinois Human Rights Act and took effect on January 1, 2026. It bars employers from using AI that has the effect of discriminating against employees on the basis of a protected class, and from using zip codes as a stand-in for a protected class. It also requires notice when AI is used in decisions such as recruitment, hiring, promotion, discharge or discipline.
The detail on notice was left to the Illinois Department of Human Rights. The department published proposed rules on May 15, 2026, then announced on June 2 that it was withdrawing and postponing them to collaborate with other state agencies. The statute stays in force, but the exact notice format is unsettled. We found no report of refiled rules as of this writing.
Colorado: replaced and delayed
Colorado’s original AI Act, SB 24-205, never took effect. It was delayed once and then repealed and replaced by SB 26-189, which the governor signed on May 14, 2026, according to the General Assembly’s page. The new law covers automated decision-making technology that materially influences consequential decisions, including employment.
Developers must give deployers documentation on intended uses, training data categories and limitations. Deployers must give clear notice at the point of interaction, explain the technology’s role within 30 days after an adverse outcome, and allow people to request their data, corrections and human review. Records must be kept for at least three years. The attorney general enforces the law, with a 60-day chance to cure before January 1, 2030, and the page lists January 1, 2027 for several duties. Reports also describe litigation affecting enforcement; check current status before relying on a date.
The federal picture: the EEOC
Federal anti-discrimination law still applies to hiring tools, whether or not a tool is labeled AI. The EEOC’s current AI Governance page lists federal agency compliance plans and an AI use inventory; it does not carry hiring-tool guidance. Law firm reports say the agency removed its earlier technical assistance on AI under Title VII and the ADA in 2025, after an April 2025 executive order told agencies to deprioritize disparate-impact enforcement. Those documents were non-binding, and the underlying statutes were not changed. Sources differ on the removal date, so we do not give one.
Checklist for employers
- Inventory every tool that screens, ranks or scores candidates, including features inside your applicant tracking system.
- Ask vendors for bias-audit results, validation evidence and the data the tool uses.
- In New York City, confirm an audit within the past year, publish the summary and send notices 10 business days ahead.
- In Illinois, tell applicants and employees when AI informs covered decisions, and avoid zip codes as a proxy.
- Offer a human review route and accommodations for candidates with disabilities.
- Keep records of decisions and audits, and watch Colorado and EU dates.
Checklist for job seekers
- Look for notices about automated tools in the job posting or application portal.
- Ask whether AI screens applications and whether a person reviews them.
- Request an accommodation or alternative format if a test or video tool disadvantages you.
- Keep copies of applications and responses in case you need to complain.
- File complaints with the relevant agency, such as DCWP in New York City or the Illinois Department of Human Rights.
What to watch next
- Whether Illinois refiles its notice rules.
- Colorado’s attorney general rulemaking before the January 1, 2027 start of duties.
- Publication and any further changes to the EU Digital Omnibus ahead of December 2, 2027.
- Any new EEOC statements or enforcement involving automated tools.
- More state and city bias-audit laws.
Key takeaways
- NYC Local Law 144 has been enforced since July 5, 2023 and requires a bias audit within a year of use, public results and notices.
- The EU’s high-risk date for hiring systems moved from August 2, 2026 to December 2, 2027.
- Illinois HB 3773 has applied since January 1, 2026, but its notice rules were withdrawn on June 2, 2026.
- Colorado replaced its AI Act with SB 26-189, signed May 14, 2026, with key duties from January 1, 2027.
- Federal anti-discrimination law still applies even though EEOC’s earlier AI guidance has been removed.
Frequently asked questions
Do I have to be told if AI screens my job application?
It depends on where the job is. New York City requires notice for covered tools, and Illinois requires notice when AI is used in covered decisions. Elsewhere there may be no specific notice duty.
Has the EU AI Act delayed its rules for hiring AI?
Yes. The Commission’s timeline now lists December 2, 2027 for Annex III high-risk systems, which include recruitment tools, instead of August 2, 2026.
Is an employer responsible for a vendor’s biased tool?
Federal anti-discrimination law applies to employment decisions regardless of the technology, and Colorado’s new law allocates fault between developers and deployers in discrimination claims. Employers should therefore ask vendors for evidence and audits.
