Guide

AI Hiring Laws in Indiana: What Employers Need to Know

Indiana employers using AI in hiring face new federal and state requirements for disclosure, bias testing, and candidate rights. This guide covers what is proposed, what is already law in neighboring states, and how to prepare.

Last updated March 21, 2026 · Ask a question about this topic →

Current Landscape: Federal and State Hiring AI Bills

AI-powered hiring tools have become one of the most scrutinized areas of AI regulation. Employers across Indiana are using automated resume screening, AI-scored video interviews, predictive analytics for candidate selection, and chatbot-driven initial assessments. Each of these tools is the subject of proposed legislation at both the federal and state level.

At the federal level, multiple bills would require employers to disclose AI use in hiring, provide explanations to rejected candidates, and conduct bias audits. At the state level, the Indiana General Assembly has introduced bills mirroring these requirements with Indiana-specific enforcement. Illinois has already enacted the AI Video Interview Act, which directly affects Indiana employers who hire across state lines.

The common thread across all proposed legislation is transparency: candidates have a right to know when AI is evaluating them, and employers have an obligation to ensure these tools do not discriminate.

Key Takeaway

The common thread across all proposed hiring AI legislation is transparency: candidates have a right to know when AI is evaluating them, and employers must ensure these tools do not discriminate.

Related Bills

FederalIn Committee
Medium Risk

HR 10044

Rep. Greg Casar (D-TX) introduced this bill to tax companies that replace human workers with AI systems and use the revenue to fund worker protections and retraining. It targets automation-driven layoffs by making AI-based workforce displacement more expensive for employers.

ManufacturingLogistics and WarehousingCustomer Service and BPO

Last action: Aug 6, 2026

FederalIn Committee
Low Risk

S 5307

Senator Chris Coons (D-DE) introduced this bill to expand visa and immigration pathways for AI talent, aiming to help U.S. companies recruit and retain top AI researchers, engineers, and PhDs from abroad. It focuses on workforce and talent pipeline issues rather than regulating how AI is built or used.

Big TechAI StartupsHigher Education and Research

Last action: Aug 6, 2026

FederalIn Committee
Medium Risk

HR 9985

Rep. Ro Khanna's AI Ads Act would require political ads that use AI-generated content (deepfakes, synthetic voices, AI-manipulated images of candidates) to carry clear disclaimers. It targets deceptive AI use in federal campaign advertising, not commercial advertising.

Political AdvertisingAd TechGenerative AI Vendors

Last action: Jul 30, 2026

FederalIn Committee
Medium Risk

HR 9922

Rep. Joe Morelle's bill would require political ads and campaign communications to disclose when they use AI-generated content, like deepfake videos or synthetic voices of candidates. It targets the growing use of generative AI in election messaging and would create federal transparency rules for campaigns, PACs, and ad platforms.

Digital AdvertisingSocial Media PlatformsGenerative AI

Last action: Jul 23, 2026

FederalIn Committee
Low Risk

HR 9907

Rep. Mike Haridopolos (R-FL) introduced the LEARN AI Act, which directs federal education resources toward AI literacy and workforce training programs. The bill focuses on preparing students and workers for an AI-driven economy rather than regulating how companies build or deploy AI.

Education TechnologyWorkforce Training and DevelopmentHigher Education

Last action: Jul 23, 2026

FederalIn Committee
Low Risk

S 5055

Senator Mark Warner (D-VA) introduced this bill to create a National Workforce Transition Board that would fund training and education for workers displaced by AI and emerging tech. It's an advisory and grant-making body, not a regulatory one, so it doesn't impose new rules on how companies use AI.

Workforce Development and EdTechManufacturingRetail

Last action: Jul 21, 2026

Automated Resume Screening Requirements

Automated resume screening is one of the most widely used AI hiring tools. Software that scans resumes for keywords, scores candidates based on qualifications, or ranks applicants using machine learning is used by employers of all sizes across Indiana.

Proposed legislation would require employers to disclose when automated screening is used, provide rejected candidates with notice that AI was involved in the decision, and in some cases offer a human review option. Several bills also require that screening algorithms be audited for disparate impact based on race, gender, age, disability, and other protected characteristics.

Indiana employers using automated screening should document which tools they use, how those tools make decisions, and what data they process. This documentation will be required under most proposed bills and is a best practice regardless of legislation.

Related Bills

FederalIn Committee
High Risk

HR 10210

Rep. Greg Landsman (D-OH) introduced the Doctors Not AI Act of 2026, which would restrict health insurers from using AI as the sole basis for denying, delaying, or modifying medical care decisions. The bill requires that a licensed human physician, not an algorithm, make final coverage determinations for patient care.

Health InsuranceHealthcare AIHospitals and Health Systems

Last action: Sep 1, 2026

FederalIn Committee
Medium Risk

HR 10207

Rep. Erin Houchin (R-IN) introduced the GUARDIAN Act to address AI-related consumer protection concerns, likely focused on generative AI safety, deceptive content, or consumer harm. The bill was referred to the House Energy and Commerce Committee and has not yet advanced. Specific regulatory text and scope remain limited pending further committee action.

Consumer TechGenerative AIHR Tech

Last action: Sep 1, 2026

FederalIn Committee
Medium Risk

HR 10044

Rep. Greg Casar (D-TX) introduced this bill to tax companies that replace human workers with AI systems and use the revenue to fund worker protections and retraining. It targets automation-driven layoffs by making AI-based workforce displacement more expensive for employers.

ManufacturingLogistics and WarehousingCustomer Service and BPO

Last action: Aug 6, 2026

FederalIn Committee
Medium Risk

S 5252

Senator Bill Hagerty (R-TN) introduced this bill to block foreign adversaries (think China, Russia, Iran, North Korea) from extracting the underlying technical features of proprietary, closed-source AI models built by US companies. It targets model theft techniques like model distillation and would give the federal government new export-control-style powers over how US AI firms protect their models.

Foundation Model DevelopersCloud ComputingEnterprise SaaS

Last action: Aug 5, 2026

FederalIn Committee
High Risk

S 4199

Senator Markey (D-MA) introduced a bill that would ban companies from using AI to collect or process personal data from anyone under 17 without explicit consent. The Youth AI Privacy Act specifically targets AI systems that analyze biometric data, predict behavior, or make automated decisions about minors, requiring companies to delete collected data and conduct regular impact assessments.

Social Media PlatformsEdTechGaming and Entertainment

Last action: Aug 5, 2026

FederalIn Committee
Medium Risk

HR 9915

Rep. Laurel Lee's Stealth Bot Prohibition Act would require AI chatbots and automated systems to clearly disclose they are not human when interacting with people. The bill targets 'stealth bots' that impersonate humans in online conversations, customer service, and social media. It is currently in the House Energy and Commerce Committee.

Customer Service TechSocial Media PlatformsMarketing and Advertising

Last action: Jul 23, 2026

AI Interview and Assessment Tool Regulations

AI-powered video interviews that analyze facial expressions, voice patterns, word choice, or body language are subject to some of the strictest proposed requirements. Several federal bills would require explicit candidate consent before AI analysis of video interviews, and Illinois has already banned AI video interview analysis without consent.

Beyond video interviews, AI-driven skills assessments, personality tests, and cognitive ability evaluations are also targeted. Proposed requirements include providing candidates with information about what the AI measures, how it scores responses, and what weight the AI assessment carries in the overall hiring decision.

Indiana employers using any form of AI-assisted assessment should review their vendor contracts to confirm the tools comply with proposed requirements. Vendors should be able to demonstrate bias testing results and explain how their algorithms work.

Related Bills

FederalIn Committee
Medium Risk

HR 10146

Rep. Seth Magaziner (D-RI) introduced the AI Advertising Disclosure Act, which would require advertisers to clearly label ads that use AI-generated content (images, video, audio, or text). Currently sitting in the House Energy and Commerce Committee, the bill targets deceptive or undisclosed synthetic media in commercial advertising across TV, digital, and social platforms.

Advertising and MarketingSocial Media PlatformsRetail and Consumer Brands

Last action: Aug 24, 2026

FederalIn Committee
Medium Risk

S 5252

Senator Bill Hagerty (R-TN) introduced this bill to block foreign adversaries (think China, Russia, Iran, North Korea) from extracting the underlying technical features of proprietary, closed-source AI models built by US companies. It targets model theft techniques like model distillation and would give the federal government new export-control-style powers over how US AI firms protect their models.

Foundation Model DevelopersCloud ComputingEnterprise SaaS

Last action: Aug 5, 2026

FederalIn Committee
High Risk

S 1748

Senator Marsha Blackburn (R-TN) reintroduced the Kids Online Safety Act (KOSA), which forces social media platforms and online services to actively prevent harm to minors from features like algorithmic recommendations, addictive design, and content promoting suicide, eating disorders, or substance abuse. Platforms would owe minors a legal 'duty of care' and must give kids and parents tools to disable addictive features and limit data collection. It sits in the Senate Commerce Committee after passing the Senate 91-3 in the previous Congress.

Social MediaOnline GamingEdTech

Last action: Aug 5, 2026

FederalIn Committee
High Risk

S 4199

Senator Markey (D-MA) introduced a bill that would ban companies from using AI to collect or process personal data from anyone under 17 without explicit consent. The Youth AI Privacy Act specifically targets AI systems that analyze biometric data, predict behavior, or make automated decisions about minors, requiring companies to delete collected data and conduct regular impact assessments.

Social Media PlatformsEdTechGaming and Entertainment

Last action: Aug 5, 2026

FederalIn Committee
Medium Risk

HR 9985

Rep. Ro Khanna's AI Ads Act would require political ads that use AI-generated content (deepfakes, synthetic voices, AI-manipulated images of candidates) to carry clear disclaimers. It targets deceptive AI use in federal campaign advertising, not commercial advertising.

Political AdvertisingAd TechGenerative AI Vendors

Last action: Jul 30, 2026

FederalIn Committee
High Risk

HR 9948

Rep. Becca Balint's Addictive Design Act of 2026 targets social media platforms and apps that use engagement-maximizing features like infinite scroll, autoplay, and algorithmic feeds designed to hook users, especially minors. It would restrict these 'addictive' design patterns and likely give the FTC enforcement authority, following a growing wave of state laws like California's and New York's.

Social MediaGaming and Mobile AppsEd-Tech

Last action: Jul 27, 2026

Employee Monitoring and Workplace AI

AI is not just used in hiring. Indiana employers increasingly use AI to monitor employee productivity, analyze communications, track location, and flag performance issues. Several proposed bills extend AI transparency requirements to the entire employment relationship, not just the hiring process.

Key proposals include requiring employers to disclose all AI monitoring tools in use, limiting the types of data that can be collected, and giving employees the right to access data collected about them. Some bills also restrict the use of AI in termination and disciplinary decisions, requiring human review before adverse employment actions based on AI analysis.

Indiana employers should inventory all AI tools used across the employee lifecycle, from recruiting to onboarding to ongoing management to separation. This inventory is the starting point for compliance with any workplace AI legislation.

Related Bills

FederalIn Committee
High Risk

HR 10210

Rep. Greg Landsman (D-OH) introduced the Doctors Not AI Act of 2026, which would restrict health insurers from using AI as the sole basis for denying, delaying, or modifying medical care decisions. The bill requires that a licensed human physician, not an algorithm, make final coverage determinations for patient care.

Health InsuranceHealthcare AIHospitals and Health Systems

Last action: Sep 1, 2026

FederalIn Committee
Low Risk

HR 10180

Rep. George Whitesides (D-CA) introduced this bill to have the federal government monitor and study AI systems that can improve themselves without human intervention (think AI models that rewrite their own code or retrain themselves). It's currently sitting in the House Science Committee and focuses on tracking risks from recursive self-improvement, not regulating specific business practices yet.

Foundation Model DevelopersCloud InfrastructureDefense and National Security

Last action: Aug 27, 2026

FederalIn Committee
Medium Risk

HR 10044

Rep. Greg Casar (D-TX) introduced this bill to tax companies that replace human workers with AI systems and use the revenue to fund worker protections and retraining. It targets automation-driven layoffs by making AI-based workforce displacement more expensive for employers.

ManufacturingLogistics and WarehousingCustomer Service and BPO

Last action: Aug 6, 2026

FederalIn Committee
Low Risk

S 5307

Senator Chris Coons (D-DE) introduced this bill to expand visa and immigration pathways for AI talent, aiming to help U.S. companies recruit and retain top AI researchers, engineers, and PhDs from abroad. It focuses on workforce and talent pipeline issues rather than regulating how AI is built or used.

Big TechAI StartupsHigher Education and Research

Last action: Aug 6, 2026

FederalIn Committee
High Risk

S 5154

Senator Jon Husted (R-OH) introduced this bill to protect minors from harms linked to AI companion chatbots (think Character.AI or Replika-style products). It would require age verification, safety guardrails, and disclosures for chatbot platforms that kids can access, and it would create liability for companies whose bots engage minors in sexual, self-harm, or other harmful conversations.

Consumer AI / Chatbot PlatformsSocial MediaEdTech

Last action: Jul 28, 2026

FederalIn Committee
High Risk

HR 9948

Rep. Becca Balint's Addictive Design Act of 2026 targets social media platforms and apps that use engagement-maximizing features like infinite scroll, autoplay, and algorithmic feeds designed to hook users, especially minors. It would restrict these 'addictive' design patterns and likely give the FTC enforcement authority, following a growing wave of state laws like California's and New York's.

Social MediaGaming and Mobile AppsEd-Tech

Last action: Jul 27, 2026

Bias Audit and Impact Assessment Obligations

Multiple proposed bills require employers to conduct bias audits of AI hiring tools. These audits evaluate whether AI systems produce disparate outcomes based on protected characteristics such as race, gender, age, and disability status.

Audit requirements vary by bill, but common elements include: annual third-party audits of automated employment decision tools, publication of audit results (in some proposals), and corrective action plans when disparate impact is identified. New York City's Local Law 144 serves as a model that several federal and state bills follow.

Indiana employers should ask their AI hiring tool vendors whether independent bias audits have been conducted, request copies of audit results, and include bias audit requirements in vendor contracts going forward.

Key Takeaway

Ask your AI hiring tool vendors whether independent bias audits have been conducted. Request copies of audit results. Include bias audit requirements in vendor contracts going forward.

Related Bills

FederalIn Committee
High Risk

HR 10210

Rep. Greg Landsman (D-OH) introduced the Doctors Not AI Act of 2026, which would restrict health insurers from using AI as the sole basis for denying, delaying, or modifying medical care decisions. The bill requires that a licensed human physician, not an algorithm, make final coverage determinations for patient care.

Health InsuranceHealthcare AIHospitals and Health Systems

Last action: Sep 1, 2026

FederalIn Committee
High Risk

S 1748

Senator Marsha Blackburn (R-TN) reintroduced the Kids Online Safety Act (KOSA), which forces social media platforms and online services to actively prevent harm to minors from features like algorithmic recommendations, addictive design, and content promoting suicide, eating disorders, or substance abuse. Platforms would owe minors a legal 'duty of care' and must give kids and parents tools to disable addictive features and limit data collection. It sits in the Senate Commerce Committee after passing the Senate 91-3 in the previous Congress.

Social MediaOnline GamingEdTech

Last action: Aug 5, 2026

FederalIn Committee
High Risk

S 4199

Senator Markey (D-MA) introduced a bill that would ban companies from using AI to collect or process personal data from anyone under 17 without explicit consent. The Youth AI Privacy Act specifically targets AI systems that analyze biometric data, predict behavior, or make automated decisions about minors, requiring companies to delete collected data and conduct regular impact assessments.

Social Media PlatformsEdTechGaming and Entertainment

Last action: Aug 5, 2026

FederalIn Committee
Medium Risk

S 5171

Senator Tammy Duckworth (D-IL) introduced this bill to regulate AI-powered toys and products marketed to children under 13. It would create federal safety standards covering data collection, content generation, and mental health impacts of AI toys, with FTC enforcement authority.

Toy ManufacturingConsumer ElectronicsEdTech

Last action: Aug 5, 2026

FederalIn Committee
Low Risk

HRES 1471

Rep. Ro Khanna (D-CA) introduced a non-binding House resolution stating that Americans living near AI data centers deserve transparency and local control over their construction and operation. It's a statement of principle, not a law, expressing that communities should have a say in how AI infrastructure gets built in their backyards.

Cloud ComputingData Center OperationsHyperscale AI Infrastructure

Last action: Aug 3, 2026

FederalIn Committee
High Risk

HR 9948

Rep. Becca Balint's Addictive Design Act of 2026 targets social media platforms and apps that use engagement-maximizing features like infinite scroll, autoplay, and algorithmic feeds designed to hook users, especially minors. It would restrict these 'addictive' design patterns and likely give the FTC enforcement authority, following a growing wave of state laws like California's and New York's.

Social MediaGaming and Mobile AppsEd-Tech

Last action: Jul 27, 2026

Compliance Checklist for Indiana Employers Using AI in Hiring

Step 1: Inventory all AI tools used in your hiring process. Include resume screening software, chatbots, assessment platforms, video interview analysis, background check AI, and any other automated tools that influence hiring decisions.

Step 2: For each tool, document what data it collects, how it makes decisions, and what role its output plays in your hiring process. Determine whether the tool makes autonomous decisions or provides recommendations that humans review.

Step 3: Review vendor contracts for each AI hiring tool. Check for bias audit commitments, data usage rights, indemnification clauses, and compliance representations. Update contracts to include required protections.

Step 4: Assess your current candidate notification practices. Do you tell candidates when AI is used? Do you provide explanations for AI-driven rejections? Do you offer a human review option? Most proposed bills require all three.

Step 5: Request bias audit results from your vendors. If audits have not been conducted, determine whether your organization or your vendor will be responsible for conducting them under proposed legislation.

Step 6: Establish a monitoring process. Assign someone to track AI hiring legislation at both the federal and state level. Subscribe to our weekly newsletter for plain-English updates on bills that affect Indiana employers.

Keep reading

Related Guides

Common questions

Frequently Asked Questions

Is it legal to use AI for hiring in Indiana?

Yes, using AI in hiring is currently legal in Indiana. However, multiple federal and state bills are proposing new requirements for employers who use AI hiring tools. These proposed rules include mandatory disclosure to candidates, bias audits, and human review options. Even without specific AI hiring laws, existing anti-discrimination laws (Title VII, Indiana Civil Rights Law) already apply to AI-driven hiring decisions that produce discriminatory outcomes.

Do I need to tell candidates about AI screening in Indiana?

Indiana does not currently require AI hiring disclosure, but multiple proposed bills at both the federal and state level would make disclosure mandatory. Illinois already requires consent for AI video interview analysis under the AI Video Interview Act. As a best practice, Indiana employers should begin disclosing AI use in hiring now to build candidate trust and prepare for likely regulation.

What is a bias audit for AI hiring tools?

A bias audit is an independent evaluation of whether an AI hiring tool produces disparate outcomes based on protected characteristics like race, gender, age, or disability. Several proposed bills require annual third-party bias audits of automated employment decision tools, following the model established by New York City's Local Law 144. Audits typically analyze selection rates across demographic groups and identify statistically significant disparities.

Can I be sued for using AI in hiring in Indiana?

Under current law, you can be sued if your AI hiring tools produce discriminatory outcomes that violate Title VII or the Indiana Civil Rights Law, even if the discrimination was unintentional. Several proposed federal bills would create additional private rights of action specifically for AI-driven employment decisions, potentially increasing litigation risk for employers who use AI hiring tools without proper safeguards.

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