Why This Story Matters:
In August 2024, Illinois passed a law to protect employees against discrimination from the use of Artificial Intelligence (AI) in employment-related decisions. In addition, another state has already passed – and several states have proposed – an AI employment discrimination law. Employers using background screening need to know more about these laws.
Illinois Artificial Intelligence (AI) Employment Discrimination Law
On August 9, 2024, Illinois Governor J.B. Pritzker signed into law House Bill 3773 (HB 3773) to protect employees against discrimination from the use of Artificial Intelligence (AI) in employment-related decisions. HB 3773 – which amends the Illinois Human Rights Act and applies to most employers in Illinois – will take effect on January 1, 2026.
HB 3773 defines “Artificial Intelligence” as a “machine-based system that… infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.” AI also includes “Generative Artificial Intelligence” which can produce “outputs that simulate human-produced content.”
HB 3773 will prohibit employers from using Artificial Intelligence that has the effect of subjecting employees to discrimination on the basis of protected classes 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.”
In addition, HB 3773 will also require an employer “to provide notice to an employee that the employer is using artificial intelligence” if AI is used 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.
Artificial Intelligence (AI) Employment Discrimination Law Passed in Colorado
In May 2024, Colorado became the first U.S. state to pass a law to protect consumers from harm caused by the use of Artificial Intelligence (AI) systems. Colorado Senate Bill 24-205 – also known as the Colorado Artificial Intelligence Act (CAIA) – would regulate the private-sector use of AI systems and impose obligations on employers in the state of Colorado.
The CAIA – which will take effect on February 1, 2026 – applies to Colorado businesses that use AI systems to make employment decisions. Although Colorado is the first state to pass legislation addressing AI-based discrimination, similar bills have been proposed in several other states such as California, Georgia, Hawaii, Illinois, and Washington.
Artificial Intelligence (AI) Employment Discrimination Laws Proposed in Several States
In 2024, legislators in California, Georgia, Hawaii, Illinois, and Washington proposed bills aimed at regulating the use of Artificial Intelligence (AI) systems to make – or to assist an employer in making – employment decisions. More specifically, these bills seek to mitigate the risk of “Algorithmic Discrimination” arising from an employer’s use of an AI system.
Several states have proposed legislation addressing “Algorithmic Discrimination” that describes any condition in which the use of an AI system results in differential treatment or impact that disfavors an individual on the basis of protected characteristics such as age, color, ethnicity, disability, national origin, race, religion, and sex.
Many of the proposed bills would impose similar obligations onto employers that use an AI system or an “Automated Decision Tool (ADT)” in making employment-related decisions. ADT means a system that uses AI and has been specifically developed to make – or contribute to making – consequential employment decisions.
What ClearStar Does to Help Employers With Artificial Intelligence (AI) Laws
ClearStar – a global workforce screening company specializing in background checks, drug testing, and occupational health services – helps employers stay up to date with changes in background screening laws that may impact them through blogs, webinars, whitepapers, and a monthly Screening Compliance Update. ClearStar background screening services include:
- Criminal Record Searches at Federal, State, and County Levels
- Sex Offender Registry Searches
- Employment/Education Verifications
- Licenses and Credentialing
- Personal Reference Checks
- Motor Vehicle Record (MVR) Searches
- Social Media Screening
- Civil Record Searches
- Employment Credit Reports
- Employee Monitoring
- Contractor Screening
- Tenant Screening
- Global Searches in 230+ Countries
ClearStar’s numerous certifications help ensure the privacy, security, and confidentiality of consumer data used during the background screening process. The use of Artificial Intelligence (AI) by employers coming under scrutiny was the #1 trend in a “Top Trends in Workforce Screening” white paper researched by ClearStar. To learn more, contact us.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), identity theft, privacy, social media screening, and workplace violence.
At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.
