Colorado passes AI legislation, but governor has concerns
A new Colorado law outlines steps employers must take to avoid discrimination when using AI systems and underscores the responsibility that comes with using AI to make employment decisions.
The basics of Colorado’s AI law
Following is a breakdown of Colorado’s “Concerning Consumer Protections in Interactions with Artificial Intelligence Systems” law. The scope of the law could serve as a guide for employers anywhere that are concerned about the risks of AI use in their organizations.
Colorado Senate Bill 24-205:
Purpose:
- To prevent algorithmic discrimination, which can occur when AI systems make decisions that unfairly impact individuals based on characteristics like race, gender, or age.
Developers must:
- Take reasonable care to avoid algorithmic discrimination.
- Provide information about the AI system to deployers, including any risks of discrimination and how these risks are managed.
- Disclose any known risks of algorithmic discrimination to the attorney general and deployers within 90 days of discovery.
Deployers (end users) must:
- Use reasonable care to avoid algorithmic discrimination.
- Implement risk management policies and conduct impact assessments of the AI systems.
- Review the AI systems annually to ensure they do not cause discrimination.
- Notify the consumer and provide an opportunity for human review if feasible when an AI system makes a consequential decision about that consumer.
Not perfect
While Colorado Governor Jared Polis signed Senate Bill 24-205 into law on May 17, he indicated he doesn’t think the law designed to prevent discriminatory use of artificial intelligence (AI) is perfect.
The governor sent a letter to members of the Colorado General Assembly encouraging them to reconsider and amend parts of the new law before it takes effect on February 1, 2026.
Concern over discrimination risks
The governor’s concern is that the law doesn’t target discriminatory actions as much as it would put the system developer and deployer (i.e., end user) of an AI system at risk of negligence charges if someone files a discrimination claim because of decisions made by an AI tool.
Under Colorado’s AI law, a “deployer” is any person or business operating in Colorado that uses high-risk AI systems, such as employers using AI tools during the hiring process.
The governor also noted the need for a cohesive federal approach to regulating the use of AI. Currently, there is a patchwork of oversight regarding the technology, ranging from municipal and state regulations to federal guidance and international law.
For example, Colorado’s new law joins the:
- Equal Employment Opportunity Commission’s technical assistance documents,
- Department of Labor’s Wage and Hour Division recent Field Assistance Bulletin on the workplace use of AI,
- New York City automated employment decision tools law,
- Illinois’ Artificial Intelligence Video Interview Act, • Maryland’s facial recognition law, and
- European Union’s AI Act.
Key to remember: Colorado has passed a new law that is part of a growing trend to ensure that AI systems are used responsibly and do not perpetuate biases or discrimination.