As of October 2026: Illinois requires notice, an explanation and consent before AI analyzes a recorded video interview, and deletion within 30 days on request. New York City requires a yearly independent bias audit, a published summary and 10 business days' notice before an automated employment decision tool is used on city residents. Colorado replaced its 2024 AI Act with SB 26-189, effective January 1, 2027, which requires notice, an explanation after adverse decisions, and a way to correct data and ask for human review. Federal anti-discrimination law applies everywhere.
Most US small businesses can use AI in hiring without a license, a registration or an audit. Federal anti-discrimination law (Title VII, the ADA, the ADEA) applies to AI-assisted decisions exactly as it applies to human ones, and using a vendor's tool does not move that responsibility off the employer.
On top of that, three jurisdictions have rules written specifically for AI in hiring: Illinois, New York City and Colorado. What triggers each one is not where your company is headquartered but where the job is based or where the candidate lives. A 50-person company in Ohio that hires a remote worker living in Brooklyn can be inside New York City's rule. This guide is current as of October 2026.
The Artificial Intelligence Video Interview Act (820 ILCS 42) has been in effect since January 1, 2020. It applies to any employer that asks applicants to record video interviews and uses AI to analyze those videos for positions based in Illinois. There is no minimum company size.
Before the interview, the employer must:
After the interview, videos may be shared only with people whose expertise or technology is needed to evaluate the applicant. If an applicant asks, the employer must delete the interview within 30 days and tell anyone who received copies, including backups, to delete them too.
Since January 1, 2022 (Public Act 102-0047), employers that rely solely on AI analysis of video interviews to decide who gets an in-person interview must also collect the race and ethnicity of applicants who were and were not selected, and of those hired, and report it to the Illinois Department of Commerce and Economic Opportunity every year by December 31.
A second Illinois law is broader. Public Act 103-0804 (HB 3773) amended the Illinois Human Rights Act, effective January 1, 2026. It makes it a civil rights violation to use AI in employment decisions in a way that has a discriminatory effect on protected classes, bars using ZIP codes as a stand-in for a protected class, and requires employers to give notice when they use AI for these decisions. The Illinois Department of Human Rights proposed detailed notice rules in 2026 and then withdrew them for revision, so the duty to give notice exists while the exact format is still unsettled. Check IDHR before relying on any template.
New York City's law on automated employment decision tools (AEDTs) has been enforced by the Department of Consumer and Worker Protection (DCWP) since July 5, 2023. It covers employers and employment agencies that use an AEDT to substantially assist or replace discretionary decisions about hiring or promotion, for candidates and employees in the city. The law sets no minimum company size.
Before using a covered tool, the employer must:
Penalties are up to $500 for a first violation and $500 to $1,500 for each later one, and each day a tool is used without a required audit counts as a separate violation.
Whether your tool is covered turns on the phrase "substantially assist or replace." DCWP's final rules define it narrowly: relying solely on the tool's score or ranking, weighting it more than any other criterion, or using it to overrule conclusions from other factors, including human judgment. A process where a person reviews the evidence and decides may fall outside that definition, but this is a judgment to make with counsel, and the safest course for NYC candidates is to treat any scoring tool as possibly covered.
Colorado's story changed twice, so dates matter here.
SB 26-189 covers automated decision-making technology that processes personal data and materially influences a consequential decision, and employment is one of the listed areas. For employers using such a tool on Colorado residents, the core duties are:
The new law dropped the 2024 version's risk-management program, impact assessments and standalone duty to avoid algorithmic discrimination; existing Colorado anti-discrimination law applies instead. The Attorney General enforces it under the Colorado Consumer Protection Act, there is no private right of action, and the Attorney General is to adopt implementing rules.
Expect more change. A federal lawsuit filed in April 2026 by xAI, which the US Justice Department joined, challenges Colorado's AI law. Separately, a December 2025 executive order directs the Justice Department to challenge state AI laws the administration considers inconsistent with national policy (White House fact sheet); an executive order does not by itself repeal a state law. Check the status before January 1, 2027.
California's Civil Rights Council regulations on automated-decision systems under the Fair Employment and Housing Act took effect October 1, 2025. They apply existing anti-discrimination rules to AI tools, treat a vendor acting for an employer as the employer's agent, and require keeping automated-decision records for four years (California Civil Rights Department). Other states have bills in progress; the three above are the ones with rules written specifically for AI in hiring that small employers most often run into.
Some design choices make these rules easier to meet. HRBlade scores the content of what candidates say, not their faces, voices or emotions, and we have put that in writing in the no emotion recognition attestation. Every score comes with the quotes it is based on, which is what you need to explain a decision to a candidate, a regulator or yourself. The AI hands you a shortlist; a person decides who moves forward. Candidate data is hosted in the EU (Amsterdam) and can be deleted on request. Our AI transparency statement and trust center set out what the AI does and does not do.
None of that makes a company compliant on its own. Notices, consent, bias audits where required, record-keeping and the final decision are the employer's responsibility, whichever tool you use. Because HRBlade's video interviews are analyzed by AI, assume the Illinois act applies to them and collect consent; phone and chat interviews are outside that act's text but inside the broader notice rules.
If you are a small company weighing AI interviews, the small business page explains the workflow. Sign up free and explore with sample candidates; add a card to go live; the first charge comes after 24 hours, and you can cancel anytime. The Small Business plan is $99 a month, or $79 a month billed annually (see pricing).
This article is general information as of October 2026, not legal advice. Laws, rules and court decisions in this area are changing quickly; talk to employment counsel about your situation before you rely on it.
Only New York City's Local Law 144 requires one, and only for automated employment decision tools used on candidates or employees in the city. Illinois and Colorado do not require a bias audit, though federal and state anti-discrimination law still applies.
Its text covers recorded video interviews analyzed by AI for Illinois-based positions. Phone and chat interviews fall outside that act, but Illinois' 2026 Human Rights Act amendment requires notice whenever AI is used in employment decisions.
SB 26-189, which replaced the 2024 Colorado AI Act, takes effect January 1, 2027. The 2024 law never took effect, and a federal lawsuit challenging Colorado's AI law was pending as of October 2026.
Yes, potentially. The Illinois video interview act and NYC Local Law 144 have no minimum company size, and Colorado's new law turns on whether you use covered tools for decisions about Colorado residents.
In New York City, the notice must tell candidates they can request an alternative selection process or accommodation. In Colorado from 2027, people can request human review and reconsideration of an adverse decision.
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