Artificial intelligence is transforming recruiting and hiring, helping employers streamline resume screening, candidate assessments, interview scheduling, and more. However, as AI becomes more involved in employment decisions, lawmakers are increasingly focused on ensuring these technologies are used fairly and transparently.
Several states and municipalities have enacted laws that require employers to disclose when AI is used in the hiring process, particularly when automated tools have a meaningful impact on employment decisions. These regulations are designed to prevent algorithmic discrimination, protect candidate rights, and provide greater transparency into how hiring decisions are made.
States Requiring Disclosure of AI Use in Hiring and Recruiting
Here’s a look at some of the jurisdictions currently requiring disclosure, notice, or consent related to AI-powered hiring tools.
1. Illinois
Illinois was among the first states to regulate AI in hiring through its Artificial Intelligence Video Interview Act. Under the law, employers must:
- Notify applicants when AI will be used to analyze video interviews.
- Explain how the technology evaluates candidates.
- Obtain applicant consent before using the AI tool.
In addition, Illinois requires employers to notify applicants and employees more broadly when AI is used in recruitment and hiring processes.
2. Colorado
The Colorado Artificial Intelligence Act establishes some of the most comprehensive AI governance requirements in the country.
Employers must provide clear and conspicuous notice to applicants when automated decision-making technology is being used. The law also requires specific disclosures when an adverse employment-related decision is made with the assistance of AI.
Connecticut
Connecticut requires employers to provide candidates with:
- Clear, plain-language notice when automated employment decision tools are used.
- A written description of the automated decision-making process.
- Information about the nature of the decision being made.
- A mechanism that allows individuals to opt out of the automated process.
These requirements are intended to help candidates better understand how technology may influence hiring outcomes.
3. New York City
New York City’s Local Law 144 governs the use of Automated Employment Decision Tools (AEDTs).
Employers using AEDTs to evaluate candidates or employees must:
- Notify candidates that the tool will be used.
- Inform individuals about the qualifications and characteristics being assessed.
- Make a recent bias audit publicly available.
The law has become a model for other jurisdictions considering similar AI transparency requirements.
4. Maryland
Maryland’s law focuses specifically on facial recognition technology.
Employers must obtain an applicant’s consent before using AI-powered facial recognition technology during an interview. This requirement addresses privacy concerns associated with biometric data collection and analysis.
5. California
California continues to expand oversight of AI in employment through regulations under the state’s Fair Employment and Housing Act (FEHA).
The regulations impose requirements related to automated decision systems (ADS), including transparency obligations and recordkeeping requirements designed to help employers demonstrate compliance and monitor for discriminatory outcomes.
What Employers Should Pay Attention To
Even organizations operating in states without specific AI hiring laws should pay close attention to these developments. AI-related employment legislation is evolving rapidly, and many lawmakers are considering additional requirements around transparency, bias audits, candidate notice, and employer accountability.
Organizations that use AI-powered recruiting tools should work closely with legal counsel and technology vendors to ensure compliance with applicable laws and to understand how automated systems may affect employment decisions.
As AI becomes more integrated into recruiting and hiring, transparency is becoming a central compliance requirement. Illinois, Colorado, Connecticut, Maryland, California, and New York City have all established rules requiring employers to notify candidates, obtain consent, provide disclosures, or demonstrate fairness when using AI in employment decisions.
Because state and local legislation continues to evolve, employers should regularly review current requirements in every jurisdiction where they hire. For a more detailed breakdown of AI-related employment laws across the country, review Brightmine’s 50-State AI Legislation Chart and consult legal counsel regarding your organization’s specific compliance obligations.
