Why this matters.
Using software to screen résumés, rank applicants, score video interviews or decide who gets promoted does not move legal responsibility onto the vendor. Under Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e-2(k)), a selection procedure that has a disparate impact on a protected group is unlawful unless it is job-related and consistent with business necessity, and the Americans with Disabilities Act (42 U.S.C. §12112) requires reasonable accommodation, including alternatives to automated tests. On top of federal law, states and cities now regulate AI in hiring directly. New York City’s Local Law 144 of 2021 (NYC Admin. Code §§20-870 to 20-874) bans automated employment decision tools unless they have had an independent bias audit within the last year, the results are published, and candidates get at least 10 business days’ notice.
Illinois requires notice, an explanation and consent before AI analyses video interviews (820 ILCS 42), and from January 1, 2026 its Human Rights Act makes it a civil rights violation to use AI that has a discriminatory effect or to use it without notice (775 ILCS 5/2-102(L)). California’s Civil Rights Council regulations under the Fair Employment and Housing Act cover automated-decision systems from October 1, 2025. Colorado repealed its 2024 AI Act (SB 24-205) and replaced it with the Automated Decision-Making Technology Act (SB 26-189), which takes effect on January 1, 2027. When a tool materially influences an employment decision, it requires notice before use, a plain-language explanation within 30 days of an adverse decision, and a chance to request human review. Penalties in NYC run from $500 to $1,500 per violation, with each day of use counting separately, and discrimination claims can bring back pay, damages and class actions. This check shows which rules reach your hiring and what to put in place.