AI hiring laws by state: what recruiters need to know in 2026
- Illinois, NYC, Maryland, and Colorado have passed or are implementing AI hiring disclosure laws
- Staffing agencies are subject to these laws when using AI tools with candidates in those jurisdictions
- Most laws require: disclosure, candidate consent, and (in NYC) an annual bias audit
- Beaverhand's consent flow and SOC 2 certification address the major requirements
1. The regulatory landscape is changing fast
As of 2026, four states and municipalities have enacted or are implementing laws that regulate AI use in hiring: Illinois, New York City, Maryland, and Colorado. Federal guidance from the EEOC adds another layer. Agencies using AI hiring tools must understand their obligations.
The common thread: transparency. Every law requires that candidates know AI is being used and, in most cases, consent to it before the assessment begins.
2. Current AI hiring laws
| Law | Jurisdiction | Requirement | Beaverhand |
|---|---|---|---|
| Illinois AI Video Interview Act | Illinois | Disclosure + consent + audit | ✓ Compliant |
| NYC Local Law 144 | New York City | Bias audit + notice | ✓ Compliant |
| EEOC AI Hiring Guidance | Federal | No disparate impact | ✓ Compliant |
| Maryland AEIA | Maryland | Disclosure required | ✓ Compliant |
| Colorado SB 205 | Colorado | Algorithmic accountability | In review |
3. Illinois Artificial Intelligence Video Interview Act
Requires employers to: notify candidates that AI will be used, explain how it works, and obtain consent before the interview. Candidates can request deletion of video recordings. Applies to any assessment that uses AI to analyze video or audio.
4. NYC Local Law 144
Requires employers using automated employment decision tools to: conduct an annual bias audit by an independent auditor, make summary results publicly available, and notify candidates at least 10 days before the tool is used.
5. EEOC guidance on AI in hiring
The EEOC has stated that AI hiring tools are subject to existing civil rights laws. If a tool creates disparate impact — even unintentionally — the employer is liable. This applies regardless of whether the tool is developed in-house or purchased from a vendor.
6. What agencies should do now
- • Audit every AI tool in your hiring workflow
- • Verify vendor compliance certifications (SOC 2, bias audits)
- • Ensure candidate consent is collected before every AI-assisted assessment
- • Track which jurisdictions your candidates are in
- • Document your compliance process for client procurement reviews
7. How Beaverhand addresses compliance
SOC 2 Type II certified. Compliant with Illinois AIVIA and NYC Local Law 144. Candidate consent flow built into every assessment. Annual bias audits conducted. Audit reports available on request.
8. What's coming next
Federal AI hiring legislation is expected. The EU AI Act already classifies hiring as "high-risk." The trend is clear: more regulation, more disclosure, more accountability. Agencies that build compliance into their workflow now will be ahead.
This guide is for informational purposes. Consult legal counsel for compliance decisions specific to your agency and jurisdictions.