Hiring algorithms: NYC Local Law 144 and Illinois HB 3773

Lesson 4 of 6 in State AI Laws in Depth: Colorado, California, Texas, Illinois, NYC, and Beyond.

Employment is where American algorithmic-accountability law grew up, because the harm is easy to see and the legal hook already existed: Title VII has prohibited discriminatory selection procedures since 1964. Two regimes define the field.

NYC Local Law 144 — enforced since July 5, 2023 — was the first law anywhere to mandate algorithmic audits. Employers and employment agencies using an automated employment decision tool (AEDT) to substantially assist hiring or promotion decisions for NYC roles must commission an annual independent bias audit, computing selection-rate impact ratios (for pass/fail tools) or scoring-rate impact ratios (for scoring tools) by sex, race/ethnicity, and intersectional categories; publicly post a summary of results; and give candidates notice at least 10 business days before use. The Department of Consumer and Worker Protection (DCWP) enforces with per-violation, per-day penalties.

Its lesson is sobering: compliance studies found only a small fraction of covered employers had posted audits — many simply concluded their tools did not “substantially assist” decisions and opted out of scope. A mandate without an enforcement census produces paper coverage. Every state that drafted after 2023 learned from that.

Illinois HB 3773 (Public Act 103-0804, effective January 1, 2026) took the civil-rights route instead: it amends the Illinois Human Rights Act directly. Employers may not use AI in a way that discriminates in recruitment, hiring, promotion, discipline, discharge, or other terms of employment; they may not use zip code as a proxy for protected classes; and they must notify workers and applicants when AI is used in employment decisions. The Illinois Department of Human Rights enforces and writes rules — which means the full IHRA machinery, including individual charges, applies.

Illinois was already the pioneer here: its AI Video Interview Act (2020) required consent and explanation for AI-analyzed video interviews, and BIPA — the biometric privacy law with a private right of action — generated the largest AI-adjacent damages awards in the country. Read HB 3773 as the third act of a decade-long Illinois strategy: attach AI duties to strong existing rights statutes rather than writing a standalone AI code.

Interactive sorting exercise: Which regime does each obligation come from? Drag each card to its law.

Tool: Bias Audit Lab — Run an LL144-grade bias audit yourself: compute selection-rate and impact ratios on synthetic hiring data and watch small samples destabilize the math.

Interactive checkpoint quiz (1 questions) — open this page in a browser to take it.