Use of Artificial Intelligence in Employment and the legal implications

Over the past fifteen years, artificial intelligence (AI) has become embedded in the legal field in ways that were not widely anticipated. While it was initially expected that legal professionals would need to familiarize themselves with AI tools to enhance efficiency in practice, few foresaw the necessity for attorneys to possess an understanding of AI’s technical functions to competently advise clients on the legal ramifications of its use. AI has evolved beyond its routine application which was used to sort large datasets or resolve analytical problems and is now used to autonomously make decisions based on the information presented. Generative AI is capable of generating new content, such as images or text, by learning from data supplied to it. The most popular examples of generative AI, include Chat GPT, Meta AI, Claude and many more that are constantly under development.

In particular, there has been an increase of the use of AI in the employment sector, which has resulted in enhanced and efficient decision-making for many employers, particularly in the areas of recruitment and staff management. Employers are using AI to analyze candidate qualifications and employee performance. These practices are frequently justified on the basis that algorithmic decision-making can reduce human bias and produce objective outcomes. However, the Illinois Legislature has recognized the possibility of the misuse of generative AI and the potential consequences and has responded in kind by regulating its use.

The Illinois General Assembly introduced several proposed bills aimed at establishing regulatory oversight of AI. While none of the proposed bills have yet to be enacted into law, the trajectory suggests that more legislation is forthcoming as AI technologies continue to evolve. This is clear based on the recently amended Illinois Human Rights Act (IHRA).

Effective January 1, 2026, the IHRA  prohibits discriminatory employment decisions using AI. The definition of AI includes generative AI which is defined as an automated computing system that when prompted with human prompts, can produce outputs that simulate human-produced content. Under the IHRA, employers are liable for employment decisions using AI with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or the terms, privileges or conditions of employment that results in discrimination based on a protected class or that uses zip codes as a proxy for protected classes. Employers are also required to provide notice to an employee that an employer is using AI for the prior stated reasons.

As AI continues to evolve and embed itself in core business functions, it is imperative that employers consider the manner in which AI is deployed, acquire an in depth understanding of how it functions and deciphers information and never rely on AI to be the sole decision maker. If businesses are already using AI in any employment-related decisions, it is necessary to review company practices to ensure oversight of AI systems and review service providers agreements to understand how the system is reaching its decisions. Failure to do so could expose companies to substantial legal liability. In this rapidly changing landscape, staying informed and compliant is not just advisable … it is essential.

Client alert authored by Markeya A. Fowler  (312 849 4126), associate.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.