AI Hiring Laws by State: A Complete Compliance Map for 2026

Employers and HR technology vendors face a growing patchwork of state and local laws governing the use of AI in hiring and employment decisions. New York City's bias audit mandate has been in force since July 2023. Illinois has required consent and disclosure for AI video interviews since 2020. Colorado's comprehensive AI Act covers employment AI starting June 30, 2026. And legislators in more than a dozen other states are actively advancing bills.

This guide maps the current landscape—what is in effect, what is pending, and what your compliance program needs to address today.

New York City: Local Law 144 (In Effect Since July 2023)

NYC Local Law 144—the most stringent AI hiring law currently in effect in the United States—prohibits employers from using an Automated Employment Decision Tool (AEDT) for hiring or promotion decisions affecting NYC jobs unless they have completed an independent bias audit within the past 12 months and publicly disclosed the results.

Who Must Comply

Any employer, employment agency, or recruiter—regardless of company size or location—that uses an AEDT to screen, rank, or make decisions about candidates or employees for jobs performed in New York City, including fully remote jobs associated with an NYC office.

Key Requirements

• Annual independent bias audit: Conducted by a third party (not the employer and not the tool vendor). The audit assesses disparate impact across race/ethnicity, sex, and intersectional categories (e.g., Black women, Asian men). Auditors calculate the impact ratio: each group's selection or scoring rate divided by the highest-performing group's rate. An impact ratio below 80% signals potential disparate impact under the four-fifths rule.
• Public disclosure of audit results: Results must be posted on the employer's website for at least six months and must include the audit date, data sources, applicant counts by group, and impact ratio metrics.
• Advance notice to candidates: Employers must notify candidates at least 10 business days before using an AEDT in the hiring process, including what qualifications it assesses and what data it uses.
• Opt-out alternative: Candidates must be offered an alternative assessment process if they object to AEDT evaluation, if a reasonable alternative exists.

Penalties

Enforcement is by the NYC Department of Consumer and Worker Protection (DCWP). Penalties start at $500 per violation for a first offense, escalating to up to $1,500 per subsequent violation for ongoing violations. See our NYC Local Law 144 detail page.

Illinois: Artificial Intelligence Video Interview Act (AIVIA, Effective January 1, 2020)

Illinois enacted the Artificial Intelligence Video Interview Act (820 ILCS 42), effective January 1, 2020, making it one of the earliest AI hiring laws in the country.

Requirements

• Pre-interview notice: Notify applicants before the interview that AI will analyze their video and assess their fitness for the position.
• Explanation of AI criteria: Explain before the interview how the AI works and what characteristics it evaluates.
• Consent: Obtain written consent from the applicant before conducting an AI-analyzed video interview.
• Video sharing and deletion: Employers may not share videos with anyone except those evaluating the candidate. Applicants may request deletion of their video, and employers must comply within 30 days.
• Demographic reporting: If an employer relies solely on AI analysis to determine whether an applicant advances, it must collect race/ethnicity data and report it annually to the Illinois Department of Commerce and Economic Opportunity by December 31.

See our Illinois AIVIA page for the full statutory text.

Colorado: SB 205 (Effective June 30, 2026)

Colorado's comprehensive AI Act (SB 24-205) covers employment AI as part of its broader high-risk AI framework. AI systems that make or materially influence consequential decisions about employment or job opportunities for Colorado residents trigger the full SB 205 compliance regime, including annual impact assessments, risk management programs aligned with NIST AI RMF or ISO/IEC 42001, consumer notices before adverse AI-driven employment decisions, human review rights, and website disclosures. The small employer exemption (fewer than 50 employees, not using own training data) may apply to some businesses. See our AI in hiring topic page for a detailed Colorado hiring AI checklist.

Maryland: HB 1202 (Facial Recognition in Hiring, Effective October 1, 2020)

Maryland's House Bill 1202 (HB 1202) restricts employers from using facial recognition technology on job applicants without written consent. It applies specifically to facial recognition, but is relevant for any employer using AI tools with facial analysis components.

State-by-State Status at a Glance

What HR Technology Vendors Must Know

If you build or sell AI-powered hiring tools, your compliance obligations are distinct from your employer-clients'. Under NYC LL 144, the vendor cannot conduct the bias audit—only an independent third party can. Under Colorado SB 205, the AI developer must provide deployers with model cards and dataset documentation and must notify the AG within 90 days if the system causes or is likely to cause algorithmic discrimination. Contracts with employer-clients should clearly allocate compliance responsibilities, including who bears audit costs. See our AI vendor contract guidance.

What Is Coming

As of May 2026, legislators in Washington, New Jersey, Texas, and several other states are advancing bills that would impose bias audit requirements, disclosure mandates, or impact assessment obligations for AI hiring tools. The trajectory is clear: what NYC introduced in 2021 is becoming a national standard. Subscribe to our daily AI law digest to track new hiring AI bills.

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.