Four US states have passed laws specifically regulating AI in hiring decisions. Three are already in effect. One takes effect in October 2026. A fifth framework follows in January 2027. If your company uses AI-assisted resume screening, video interview analysis, or automated candidate ranking, at least one of these laws likely applies to you.
At a glance: This article covers the active and upcoming US state laws regulating AI hiring tools — what each law requires, who it covers, what "AEDT" means in practice, and the federal EEOC guidance that overlays everything. Format: state-by-state compliance matrix + action checklist + vendor due diligence questions.
State-by-State Compliance Matrix
| Law | Jurisdiction | Status | What it requires | Who is covered |
|---|---|---|---|---|
| NYC Local Law 144 | New York City employers | Active since July 2023 | Annual independent bias audit + public posting of results; candidate notification before AEDT use | Any employer or employment agency using an AEDT for NYC-based employees or applicants |
| Illinois HB 3773 (AI Video Interview Act amendment) | Illinois | Active since January 1, 2026 | Written notice + consent before AI video analysis; human review option on request | Any employer using AI to analyze video interviews of Illinois-resident candidates |
| Connecticut AIRT Act (SB 5) | Connecticut | Anti-discrimination effective Oct 1, 2026; disclosure obligations effective Oct 1, 2027 | Anti-discrimination ("AI is not a defense"); AEDT disclosure to applicants/employees (Oct 2027); AI-related layoffs flagged in WARN notices | Employers using automated decision-making in employment decisions affecting CT residents |
| Colorado SB 189 (ADMT framework) | Colorado | Effective January 1, 2027 | Transparency notice when ADMT influences consequential decisions; consumer rights to request information and appeal | Any company using automated decision-making that influences consequential decisions for Colorado residents |
| Federal civil rights statutes (Title VII / ADA / ADEA) | All US employers | Always in effect | Disparate impact doctrine applies to AI hiring tools; employer liable for discriminatory outcomes from third-party AI vendors | All US employers subject to federal anti-discrimination law |
NYC Local Law 144 — What "Annual Bias Audit" Means in Practice
NYC Local Law 144 is the most operationally demanding of the five frameworks. It requires:
1. An annual independent bias audit The audit must be conducted by a qualified independent auditor — not the vendor, not internal HR, and not a consultant with a financial relationship to the tool. The audit must calculate:
- Selection rates by sex, race/ethnicity, and intersectional categories
- Impact ratios comparing the selection rate of each group to the most-selected group
- The score distributions across demographic groups if the AEDT produces scores
2. Public posting of results Audit results must be posted on the employer's website, or a public URL, at least 10 business days before the AEDT is used. The posting must include the date of the audit, the source of the data, and the impact ratio results.
3. Candidate notification Candidates must be notified before the AEDT is used on their application. The notification must state that an AEDT is being used and must be available in the job posting or at least 10 business days before use.
Compliance gap: A 2026 New York State Comptroller audit found most employers using AEDTs have not completed the required annual audit, have not posted results publicly, or have not provided the required candidate notice. Civil penalties are $500 for first violation and $1,500 per subsequent violation. Private litigation is growing as plaintiffs' attorneys systematically identify non-compliant employers.
Practical first step: Contact your AI hiring tool vendor and ask: "Can you provide documentation of your bias audit results for NYC Local Law 144 compliance?" If they cannot, you need to commission an independent audit yourself or switch vendors.
Illinois HB 3773 — AI Video Interview Act
Illinois was the first state to regulate AI in video interviews (the Illinois AI Video Interview Act, signed 2019, effective January 1, 2020). HB 3773 (effective January 1, 2026) strengthened those requirements:
What the law requires:
- Written notice to the candidate before the interview that AI will analyze their verbal, non-verbal, and vocal characteristics
- Written consent from the candidate before the AI analysis proceeds
- On request: a human (not AI-augmented) review option for the candidate's video
- Limitation on sharing AI-analyzed video data — may only be shared with persons whose expertise is necessary to evaluate candidates
Who it covers: Any employer who uses AI to analyze video interviews of candidates who are Illinois residents — regardless of where the employer is headquartered.
Tools commonly triggering this: HireVue (AI interview platform), Spark Hire with AI scoring enabled, Interviewing.io with automated feedback, any custom implementation using an AI API to analyze video interview recordings.
Practical compliance: Before any AI-analyzed video interview, send a notice to the candidate explicitly stating that AI will be used to analyze the video. Include a checkbox or signature line confirming consent. Log consent records. Establish a documented process for candidates who request human-only review.
Connecticut AIRT Act — October 1, 2026
The Connecticut AI Responsibility and Transparency Act (SB 5), effective October 1, 2026, has three employment-specific provisions:
"AI is not a defense" An employer cannot defend an employment discrimination claim by arguing that the discriminatory decision was made by an algorithm or automated system. If an AI hiring tool screens out a protected class at a disproportionate rate, the employer is liable regardless of whether a human reviewed the AI's output.
AEDT disclosure requirements Employers using automated employment decision tools must:
- Disclose to affected applicants or employees that an AEDT was used in a decision affecting them
- Explain what data the AEDT used and the role it played in the decision
- Provide a mechanism to contest the automated decision
WARN Act AI disclosure Connecticut requires WARN Act notices (for qualifying mass layoffs) to explicitly disclose when the layoff decision was influenced by automated decision-making technology. Connecticut's WARN Act applies to employers with 100+ employees; qualifying layoffs are those affecting 25 or more workers.
Timeline: Anti-discrimination rules and developer obligations take effect October 1, 2026. Employer disclosure to applicants and employees takes effect October 1, 2027. If your company uses AI in hiring or layoff decisions affecting Connecticut residents, document your AEDT stack now, audit for adverse impact before October 2026, and have disclosure templates ready before October 2027.
Colorado SB 189 — January 1, 2027
Colorado's SB 189 (which replaced the more demanding SB 24-205) takes effect January 1, 2027. It uses the broader framing of "automated decision-making technology" (ADMT) rather than just employment decisions, but the employment use case is a primary focus.
Under SB 189, when ADMT influences a "consequential decision" (including employment, housing, education, credit, and healthcare), the entity using the ADMT must:
- Provide a transparency notice to the affected person
- Disclose what personal data the ADMT used
- Offer a way for the person to request information about the ADMT's role
- Provide a meaningful appeals process
Compared to the old Colorado AI Act (SB 24-205), SB 189 drops the risk assessment and algorithmic explanation requirements but keeps the core transparency and consumer rights framework. A 60-day cure period applies through 2030.
EEOC AI Guidance — The Federal Overlay
Existing federal anti-discrimination law (Title VII, ADA, ADEA) applies to AI hiring tools under the same disparate impact framework that has governed pencil-and-paper tests since the 1970s. EEOC issued a 2023 Technical Assistance document specifically applying this framework to AI; that document was withdrawn in January 2025 per Executive Order 14173. The underlying statutes remain in force.
What this means in practice:
| EEOC principle | What it means for AI tools |
|---|---|
| Disparate impact applies | If your AI screener filters out women at a higher rate than men, you have a disparate impact problem regardless of AI involvement |
| Employer liability for vendor tools | Using a third-party vendor does not transfer liability. You are responsible for the discriminatory impact of tools you deploy |
| "Business necessity" defense still applies | A facially neutral selection criterion with disparate impact is defensible if it is job-related and consistent with business necessity |
| Documentation required | The same record-keeping obligations apply to AI-based hiring decisions as to traditional ones |
The EEOC's 2023 Technical Assistance document noted that many AI hiring tools have not been validated for job-relatedness in the specific roles for which employers use them — a significant compliance gap that persists regardless of the document's subsequent withdrawal.
What Counts as an AEDT?
The term "automated employment decision tool" (AEDT) appears in NYC and Connecticut law. Colorado uses "automated decision-making technology" (ADMT). Illinois focuses specifically on video AI analysis. These definitions partially overlap:
| Tool type | NYC AEDT? | Illinois scope? | CT AEDT? | CO ADMT? |
|---|---|---|---|---|
| AI resume screener (scores/ranks candidates) | Yes | No | Yes | Yes |
| AI video interview analyzer | Yes | Yes | Yes | Yes |
| Keyword-only resume filter (no ML scoring) | Likely no | No | Likely no | Likely no |
| AI job description writer (not used to filter) | No | No | No | No |
| AI performance review tool (for promotion) | Yes | No | Yes | Yes |
| Automated scheduling that prioritizes candidates | Likely yes | No | Likely yes | Likely yes |
| AI chatbot first-round interview screener | Yes | Yes | Yes | Yes |
| LinkedIn Recruiter AI recommendations | Gray zone — seek audit | No | Gray zone | Gray zone |
Default posture: If your tool outputs a score, ranking, or recommendation that substantially influences who advances in a hiring process, treat it as an AEDT and apply the most demanding applicable state's requirements.
Vendor Due Diligence Questions
Before using any AI hiring tool, or at your next vendor renewal, ask:
- Do you have an independent bias audit conducted under NYC Local Law 144 standards? Can you share the results?
- What demographic data was used in your audit, and from which dataset?
- What is your impact ratio across sex and race/ethnicity for each tool feature?
- Do you provide a candidate notification template for NYC Local Law 144 compliance?
- Does your tool analyze video interview audio, facial expressions, or speech patterns? If yes, what is your Illinois HB 3773 compliance process?
- Do you provide documentation for Connecticut AIRT Act AEDT disclosure requirements?
- Have you validated this tool for job-relatedness under EEOC standards for the specific roles we are hiring?
- What data does your tool use in its scoring, and can you document it for state ADMT disclosure requirements?
Action Checklist
For any company using AI in hiring decisions:
- Inventory every AI tool used in your hiring and promotion process — include vendor-embedded AI features in ATS, video interview platforms, and LinkedIn Recruiter
- Map each tool to the state laws that apply based on where candidates and employees are located (not where your company is headquartered)
- For NYC-based hiring: confirm annual bias audit status for each AEDT; post results publicly; implement candidate notification
- For Illinois video interviews: implement written notice + consent before any AI video analysis; establish human review request process
- For Connecticut hires: audit for adverse impact before October 1, 2026 (anti-discrimination rules take effect); prepare AEDT disclosure templates for the October 1, 2027 employer disclosure deadline
- Request bias audit documentation from every AI hiring vendor; flag any vendor that cannot produce it
- Add EEOC job-relatedness validation to your vendor onboarding questionnaire
- Update your AI acceptable use policy to specifically address hiring tool use and compliance requirements by jurisdiction
References
- NYC Local Law 144 (2021): nyc.gov/site/dca/about/automated-employment-decision-tools.page
- Illinois AI Video Interview Act amendment (HB 3773, effective January 1, 2026): ilga.gov
- Connecticut SB 5 (AIRT Act, effective October 1, 2026): cga.ct.gov
- Colorado SB 189 (ADMT framework, effective January 1, 2027): leg.colorado.gov
- EEOC Technical Assistance on AI and Employment Discrimination (May 2023, withdrawn January 2025): eeoc.gov. Underlying statutes (Title VII, ADA, ADEA) remain in force.
- AI tool register template 2026 — track your AI hiring vendors and their compliance documentation
- EU AI Act Annex III high-risk checklist — EU parallel requirements for AI in employment decisions
