AI Hiring Disclosure Laws

As employers and HR teams enter 2026, rules governing the use of AI-powered hiring tools are becoming more concrete in multiple jurisdictions. Illinois, New York City, and Ontario each now have requirements tied to automated employment decision tools (AEDTs) or other AI used in hiring, and several other U.S. states are advancing legislation in this space.

New York City: AEDT Bias Audits and Candidate Notices

New York City’s Local Law 144 was one of the first in the U.S. to regulate AEDTs. It requires employers using automated hiring tools to conduct independent annual bias audits and make those results publicly available.

Candidates must also receive advance notice when such tools are used in hiring or promotion decisions, including information about the tool and its potential impact on their application.

Ontario: AEDT Disclosure Under Pay Transparency

In Ontario, Canada, employers using AI in the hiring process must ensure job posts comply with provincial transparency laws. While Ontario’s recent enforcement focused initially on pay transparency requirements, many teams also need to include disclosures when AI tools are used to screen or evaluate candidates as part of a fair hiring process. Ontario pay transparency guidance has moved into full enforcement as of January 1, 2026, covering salary ranges, non-wage compensation, and role type requirements.

Illinois: Mandatory Notice for AI in Hiring

Effective January 1, 2026, Illinois amended its Human Rights Act to require employers to provide notice to employees and applicants whenever AI is used to influence or facilitate employment decisions, including recruitment, hiring, promotion, discipline, tenure, or other conditions of employment.

This notice obligation applies broadly whenever AI plays any role in these decisions, even if it is not the sole basis for the outcome.

If an employer fails to give notice, it can be treated as a civil rights violation under state law.
The state agency drafting implementation rules anticipates requiring notices that include details such as the AI’s name, its purpose, the decisions it influences, the job types affected, and employee rights like accommodations.
Notices must be accessible, clearly written, and included in job postings and other communications.
For prospective candidates, draft regulations would require the AI use notice to be included in any job posting that uses AI for hiring decisions.

Other U.S. States and the Broader Trend

Beyond Illinois and New York City, several other states and localities are developing or implementing laws tied to AI in employment:

Colorado’s AI Act takes effect later in 2026 and includes transparency and non-discrimination provisions for high-risk AI systems, including those used in employment decisions.
States including California have adopted or proposed regulations requiring risk assessments or heightened transparency around AI technologies used in employment contexts.
A broader patchwork of legislation is emerging as more than 40 states consider AI employment bills, reflecting growing concern about algorithmic bias, transparency, and fairness.

Why This Matters Now

These laws signify a shift from voluntary best practices to mandatory, jurisdiction-specific compliance requirements around AI hiring tools. Employers with national or international hiring footprints must understand not only how these rules differ by location but also how they affect standard job posting content, candidate notifications, and internal governance of AI tools.

Failing to meet disclosure or transparency requirements can expose employers to civil rights claims, regulatory enforcement, or reputational risk, especially as enforcement mechanisms mature. Keeping up to date with these regulations and embedding compliant disclosures into job posts and HR processes is becoming an operational necessity.

Note: Datapeople’s AI in Hiring Guidance is designed to support compliance workflows by surfacing potential gaps and inconsistencies. It does not constitute legal advice, legal guidance, or a legal opinion, and should not be relied on as a substitute for advice from qualified counsel.