In 2024, Colorado made history by becoming the first US state to pass legislation regulating AI use in the workplace, among other settings.
But history didn’t pan out as planned. The 2024 law was ultimately axed following pushback from members of the business community and governments, including the Trump administration and Elon Musk’s xAI.
Colorado Gov. Jared Polis signed a new bill on May 14 that repeals and replaces the 2024 legislation. Here’s what employers should know about that law, which will take effect on Jan. 1, 2027.
A more targeted approach to AI regulation. Colorado’s new AI law applies to certain types of “automated decision-making technology” (ADMT) involved in “consequential decisions,” including those related to an individual’s employment.
The new legislation is less onerous than its predecessor, as it removes a number of requirements. Employers, for example, will no longer have to conduct an “impact assessment” to determine whether the technology poses a risk of “algorithmic discrimination.” They won’t have to report discriminatory outcomes to the Colorado attorney general, either, nor review AI tools on an annual basis.
When it takes effect, employers in the state will have to do the following when using ADMTs:
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