Colorado AI Employment Law Update: Law Delayed & New Requirements - HR ALERTS

Colorado AI Employment Law Update: Law Delayed & New Requirements

Implementation Date: Delayed to January 1, 2027

Colorado’s Artificial Intelligence law, which would require employers to use reasonable care to prevent algorithmic discrimination in AI-driven employment decisions, is currently on hold.

The law was originally scheduled to take effect June 30, 2026. However, on April 27, 2026, a federal court issued a temporary restraining order (TRO) blocking enforcement while legal challenges proceed.

At the same time, Colorado enacted new requirements that move portions of AI regulation forward.

What Employers Need to Know

Beginning January 1, 2027, employers using Automated Decision-Making Technology (ADMT) to materially influence employment decisions must:

• Provide clear notice before using AI tools in consequential employment decisions (e.g., hiring, promotion, termination)

• Provide additional information following an adverse decision, including:

  • The role AI played in the decision

  • Instructions for requesting additional information

  • Information on correcting inaccurate data and requesting meaningful human review

• Maintain required records related to AI-assisted decisions

Why This Matters

Even with the broader AI law delayed, Colorado continues moving toward greater transparency and oversight of AI in employment decisions. Employers using AI-based recruiting, screening, or employment tools should begin evaluating current practices now.

Reference: CO SB 26-189 

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