New Year Brings New AI Regulations for HR

As 2026 begins, U.S. employers are encountering a growing number of state-level laws governing the use of artificial intelligence in hiring and workplace decisions. States including California, Colorado, Illinois, and Texas have adopted new requirements that reflect an increasingly complex regulatory environment for HR professionals.

Several major laws take effect Jan. 1. In Illinois, House Bill 3773 amends the Illinois Human Rights Act to explicitly apply existing anti-discrimination standards to AI used in employment decisions. The law reinforces that employers remain responsible for ensuring AI tools used in hiring, promotion, discipline, and termination do not produce unlawful discriminatory outcomes. It also emphasizes employer oversight of automated systems rather than an outright prohibition on their use.

In Texas, the Responsible Artificial Intelligence Governance Act, which also goes into effect Jan. 1, establishes new expectations around transparency, risk evaluation, and governance for AI systems deployed in high-impact settings, including employment. Meanwhile, California’s amendments to the Fair Employment and Housing Act, which took effect Oct. 1, clarify how existing civil rights protections apply when automated tools are used in hiring and employment evaluations. Colorado is also moving forward with its own framework, requiring risk management programs for certain high-risk AI systems by June 2026.

Recent developments in New York further underscore the growing scrutiny of automated hiring tools. A December 2025 audit by the New York State Comptroller’s Office found that enforcement of New York City’s automated employment decision tool law has faced practical challenges, including limited complaint routing and inconsistent oversight. The audit highlights how compliance expectations may continue to evolve as regulators refine enforcement mechanisms.

For HR professionals, these developments reinforce the importance of proactive preparation. The requirements vary significantly across states, prompting many employers to evaluate whether a single national approach remains workable or if more tailored compliance strategies are needed. Key considerations include inventorying AI tools currently in use, reviewing vendor practices, strengthening documentation and monitoring procedures, and coordinating closely with legal and compliance teams.

As AI continues to expand across talent acquisition and workforce management, HR will remain central to helping organizations adapt to changing expectations around fairness, transparency, and accountability in the use of emerging technologies.