IDHR AI Rulemaking Tracker: Subpart J and HB 3773 Implementation

Current rulemaking status

As of June 16, 2026: the Subpart J rulemaking is postponed. IDHR formally published the proposed rules in the Illinois Register on May 15, 2026, triggering the standard forty-five-day notice period under the Illinois Administrative Procedure Act. Less than three weeks later, on June 2, 2026, the agency announced it was withdrawing the proposal and postponing the June 10, 2026 public hearing. The IDHR statement cited the need to allow for continued collaboration with other state agencies and noted that the agency is reviewing matters related to the rulemaking. No timeline has been announced for a revised proposal.

Operative statute: HB 3773 (Public Act 103-0804) is in force. It took effect on January 1, 2026 and continues to apply. The statutory prohibition on discriminatory AI use and the statutory notice requirement operate as a matter of the statute, not as a matter of the implementing rules. Withdrawal of the proposed rules does not suspend or modify the underlying obligations on Illinois employers.

Federal context: the December 2025 federal Executive Order on AI policy directs the U.S. Department of Justice to evaluate state AI laws for federal preemption challenges. No preemption challenge has been filed against HB 3773 as of this writing. IDHR's stated rationale for the withdrawal does not reference federal preemption; the agency cited inter-agency coordination.

Effect on employers: the statute continues to apply. IDHR has encouraged stakeholders to remain mindful of the continued applicability of the law in the interim. Employers using AI in covered employment decisions should not treat the withdrawal as a reason to defer compliance work. The substance of the withdrawn proposal, summarized below, remains a reasonable indicator of how IDHR has been interpreting the statute.

This section will be updated when IDHR re-proposes rules, publishes guidance, schedules a revised public hearing, or otherwise changes the public posture of the rulemaking. Last update: June 16, 2026.

Statutory authority

HB 3773 (Public Act 103-0804) directs IDHR to adopt "any rules necessary for the implementation and enforcement" of the statute's AI provisions. The statute specifies that rulemaking shall include, but not be limited to, "rules on the circumstances and conditions that require notice, the time period for providing notice, and the means for providing notice."

The rulemaking must follow the Illinois Administrative Procedure Act (5 ILCS 100), which requires:

• Publication of proposed rules in the Illinois Register
• A 45-day public comment period
• JCAR (Joint Committee on Administrative Rules) review
• Publication of final rules with response to comments

The withdrawn proposed Subpart J had cleared the publication stage but did not complete the comment period or JCAR review. Any revised proposal will need to restart the publication and comment process. There is no statutory deadline by which IDHR must complete the rulemaking; the statute itself operates in the interim.

What the withdrawn proposal said

The summary below reflects the rules as published in the Illinois Register on May 15, 2026 and withdrawn on June 2, 2026. The substance is not currently binding, but it is the most recent public expression of how IDHR has been interpreting the statute and remains a reasonable working framework while the rulemaking is postponed.

Scope of "covered employment decision"

The withdrawn proposal defined "covered employment decision" broadly, consistent with the statutory language. It included decisions with respect to:

• Recruitment
• Hiring
• Promotion
• Renewal of employment
• Selection for training or apprenticeship
• Discharge
• Discipline
• Tenure
• Terms, privileges, or conditions of employment

This is functionally the full life cycle of the employment relationship. AI use that influences any decision in this list triggers notice obligations and falls within the scope of the discrimination prohibition.

The "influence or facilitate" standard

Notice would have been required whenever an employer uses AI to "influence or facilitate" any covered employment decision. This is a deliberately broad standard. AI does not need to be the dispositive decision-maker; it need only influence or facilitate the decision-making process. Resume screening, candidate ranking, interview scheduling, performance scoring, and predictive analytics used in any aspect of employment decision-making fall within scope.

Notice form and timing

The withdrawn proposal anticipated that notice be provided:

• Initially, before AI is used to make or influence a covered employment decision affecting an applicant or employee
• Annually thereafter
• Whenever a new or substantially updated AI tool is introduced into a covered employment workflow

Notice would have been posted in physical and online locations accessible to employees and applicants. Specific format requirements (e.g., minimum content, font size, language accessibility) were expected to be settled in final rules.

Notice failure as an independent violation

Critically, the withdrawn proposal would have made an employer's failure to provide notice an independent violation of the IHRA, separate from any discrimination claim. Notice was not merely procedural; the absence of notice was itself actionable. Under that framework an employer could violate HB 3773 even if its AI use was fully non-discriminatory, simply by failing to provide proper notice. Whether revised rules retain this independent- violation construction is an open question.

Recordkeeping

The withdrawn proposal would have required employers to maintain records of AI use in covered employment decisions, including documentation of the AI tools used, the workflows in which AI was applied, and the notices provided. Specific retention periods were expected to align with other IHRA recordkeeping obligations (typically one to three years).

Application to employer agents

The withdrawn proposal applied broadly to "employers" under the IHRA and to their agents — including recruiters, third-party AI vendors, and others acting on the employer's behalf. The allocation of compliance obligations between employer and agent was one of the most complex open questions in the proposal and is discussed below.

Stakeholder feedback themes

Based on practitioner reporting, trade association statements, and the public posture of the rulemaking before withdrawal, the following themes characterized the stakeholder dialogue with IDHR and likely shaped the agency's decision to withdraw and re-consult. They are also the themes most likely to be revisited in any re-proposed rules.

1. Concerns about notice timing and form

Employers and trade associations have raised concerns about the practical mechanics of providing initial notice "before" AI use in every recruitment workflow. The concern is particularly acute for high-volume hiring and for AI tools used early in the recruitment funnel (e.g., resume parsers running in the background of an applicant tracking system). Stakeholders are pushing for clearer guidance on what constitutes adequate "advance" notice and whether posted notice (vs. individualized notice to each applicant) is sufficient.

2. Vendor liability allocation

Employer-side stakeholders are concerned about being held responsible for the AI behavior of third-party vendors over which they have limited visibility. Vendor-side stakeholders are pushing back against obligations being imposed directly on them. The withdrawn proposal's broad application to "agents" left this allocation unclear, and any re-proposed rules will need to specify how the obligations apply across the employer-vendor relationship.

3. Definition of "AI" for purposes of the rule

The statutory definition of "Artificial Intelligence" in HB 3773 is broad — "a machine-based system that, for explicit or implicit objectives, infers... how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments." Stakeholders have asked whether this captures basic statistical scoring, rule-based screening tools that do not employ machine learning, and traditional ATS keyword filtering. IDHR has signaled an intent to interpret the definition broadly, consistent with the statutory text.

4. Coordination with multi-state operations

Employers operating across multiple states have asked for guidance on how Illinois requirements interact with NYC Local Law 144 (bias audits), Colorado AI Act (impact assessments), and California ADMT (pre-use notice and opt-out). IDHR has not committed to specific coordination provisions but has signaled awareness of the multi-jurisdictional reality.

5. Recordkeeping burden

Small employers and trade associations have raised concerns about the cumulative recordkeeping burden of HB 3773 alongside existing IHRA, FCRA, and federal employment recordkeeping requirements. IDHR has indicated that recordkeeping requirements will be calibrated to avoid duplication where possible.

Open questions and ambiguities

Several substantive questions remain open. The withdrawal of the proposed rules means the resolution of these questions is now further off than it appeared on May 15, 2026, when formal publication suggested final rules within a quarter or two.

1. Are vendor representations a defense?

If an employer relies on vendor representations that an AI tool is non-discriminatory, and the tool is later found to produce discriminatory outcomes, can the employer defend itself by pointing to vendor representations? HB 3773 imposes strict liability — intent does not matter — so vendor representations alone are unlikely to be a complete defense. But the relationship between vendor due diligence and employer liability is one of the most practically important questions.

2. How do strict-liability claims interact with disparate-impact precedent?

The IHRA already prohibits practices with disparate impact on protected classes. HB 3773's strict liability provision adds an additional layer — AI use that has the effect of subjecting employees to discrimination is prohibited. The relationship between these two standards (whether HB 3773 is a separate cause of action or a sharpening of the disparate-impact framework) is not yet clear.

3. What constitutes an "AI tool" being introduced or substantially updated?

The withdrawn proposal would have required notice when a new or substantially updated AI tool was introduced. But AI vendors continuously update their models. Does every model update trigger renewed notice? Is there a materiality threshold? Re-proposed rules will need to address this.

4. Does notice need to be individualized or posted?

The withdrawn proposal contemplated posting notice in physical and online locations, but it was unclear whether posted notice would be sufficient or whether individualized notice to each applicant or employee would be required. Posted notice is operationally simpler; individualized notice may be required by parallel state laws (California ADMT) and is the safer compliance posture.

5. How is "agent" defined for purposes of derivative liability?

The withdrawn proposal applied to employers' agents but did not define the boundary. Are recruitment platforms agents? Are background check providers agents? Are SaaS HR vendors agents? The breadth of agent liability is one of the most consequential open questions for AI vendors operating in Illinois, and is also one of the questions most likely to be revisited in any re-proposed rules.

Federal preemption considerations

On December 17, 2025, the federal government issued an Executive Order titled "Ensuring a National Policy Framework for Artificial Intelligence." Among other provisions, the EO directs the U.S. Attorney General to establish an AI Litigation Task Force to evaluate state AI laws and challenge those deemed inconsistent with federal policy.

HB 3773 has been mentioned in commentary as a possible target for a preemption challenge, on theories that include:

• Conflict preemption with the federal AI policy framework
• Commerce Clause implications for AI vendors operating across state lines
• Section 230 implications for AI platforms
• First Amendment implications for AI as expressive technology

As of June 2026, no preemption challenge has been filed against HB 3773. IDHR's stated rationale for withdrawing the proposed Subpart J rules — inter-agency coordination — does not reference federal preemption, but the federal posture is part of the background against which the rulemaking proceeds. Employers preparing compliance posture should not assume preemption will eliminate their obligations; the prudent posture is to comply with HB 3773 while monitoring for federal developments.

Comparison to other state rulemaking

IDHR's rulemaking approach can be situated against parallel rulemaking in adjacent jurisdictions:

NYC Local Law 144

The NYC Department of Consumer and Worker Protection (DCWP) rulemaking for LL 144 — automated employment decision tools — focused on bias audit requirements, candidate notice, and audit publication. IDHR has not adopted a parallel bias audit requirement. IDHR's emphasis is on notice and recordkeeping rather than substantive testing.

Colorado AI Act

The Colorado Department of Labor and Employment (CDLE) and Colorado Department of Regulatory Agencies (DORA) rulemaking under the Colorado AI Act focuses on impact assessments, deployer obligations, and risk management programs. The Colorado approach is more prescriptive than draft Subpart J.

California ADMT regulations

The California Privacy Protection Agency (CPPA) has finalized regulations governing automated decision-making technology under the CCPA. The California approach focuses on pre-use notice, opt-out rights, and access rights — a privacy-anchored framework that differs structurally from Illinois's antidiscrimination approach.

Multi-state employers face the practical challenge of complying with all four frameworks simultaneously. A unified compliance program built to the most rigorous applicable standard is generally more efficient than maintaining separate jurisdiction-specific programs.

What employers should do while the rulemaking is postponed

Waiting for revised rules before acting is not a viable compliance posture. The statute is in force; the strict-liability provision and the notice requirement operate now. The withdrawal of the proposed rules removes a clarifying overlay but does not change the underlying obligations. Employers should take the following steps now:

1. Build the AI inventory

Identify every AI tool used in any aspect of recruitment, hiring, promotion, performance evaluation, or any other covered employment decision. Include both first-party tools and tools embedded in third-party platforms (ATS, ATS vendors, sourcing platforms, interview platforms).

2. Draft notice templates against the withdrawn proposal

Build notice templates that satisfy the framework set out in the withdrawn proposal: initial notice before AI use, annual posted notice, notice on introduction of new tools. Treat the withdrawn proposal as a reasonable working framework rather than a binding constraint, and expect to revise templates when IDHR re-proposes rules. Templates built to the withdrawn proposal are more defensible than no templates at all.

3. Update the AI vendor due diligence framework

For each AI tool in the inventory, document the vendor's representations about non-discrimination, the testing the vendor has performed, and the AI tool's role in the employment decision workflow. The records will be useful both for HB 3773 compliance and for D&O renewal documentation.

4. Establish recordkeeping practices

Document the AI tools used, the dates of introduction or substantial update, the notices provided, and the workflows in which AI was applied. The recordkeeping practice should be operational by the time HB 3773 takes effect (already January 1, 2026), regardless of final rule timing.

5. Engage with the next round of rulemaking

When IDHR re-publishes proposed Subpart J rules, submit substantive comments. The comment period is the formal mechanism for influencing final rule content. Trade association coordination can amplify employer perspectives. The withdrawal is a signal that the agency is open to further input; the next proposal is likely to reflect at least some of the concerns raised in the brief period between publication and withdrawal.

Timeline projection

The June 2, 2026 withdrawal resets the rulemaking timeline. IDHR has not stated when revised rules will be published; the agency has committed only to providing updated information as it becomes available. The revised projection below assumes IDHR will re-propose rules within a reasonable period and complete a full publication-and-comment cycle thereafter.

Stage	Status / estimated timing
Initial proposal published in Illinois Register	May 15, 2026 (completed)
Proposed rules withdrawn; rulemaking postponed	June 2, 2026 (completed)
Inter-agency consultation	Q3 2026 (estimated)
Revised proposal re-published in Illinois Register	Q4 2026 – Q1 2027 (estimated)
Forty-five-day public comment period	Q1–Q2 2027 (estimated)
JCAR review	Q2–Q3 2027 (estimated)
Final rule adoption and publication	Q3–Q4 2027 (estimated)

These projections are subject to revision based on federal preemption developments, the substance of IDHR's inter-agency consultation, and the agency's prioritization. The statutory text of HB 3773 governs employer obligations in the interim.

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This article is updated monthly as IDHR rulemaking progresses. For the most recent status, see the date stamp at the top. HR leaders who own operational compliance should see the Operating Playbook for HR Leaders, which translates the statute and the draft Subpart J framework into vendor evaluation, notice scaffolding, and a 90-day compliance calendar. Employers needing to develop a broader compliance posture should also see the HB 3773 Compliance Guide and the Illinois AI Legislative Ecosystem tracker. Employers operating across multiple jurisdictions should see the Multi-Jurisdictional AI Compliance Framework, which describes how Illinois requirements layer onto the EU AI Act, the Colorado AI Act, NYC Local Law 144, and California ADMT. Behavioral health operators in Illinois should additionally see the Illinois WOPR Act Compliance Reference. Boards evaluating the fiduciary implications of HB 3773 strict liability exposure should see AI Risk and D&O Liability for Directors. For an organization-specific HB 3773 compliance review, see the HB 3773 Employment AI Compliance Review service.