Colorado has enacted a first-of-its-kind state law (SB 24-205) that establishes comprehensive compliance obligations for covered employers that use high-risk artificial intelligence systems to assist in employment-related decisions. Subject to numerous exceptions, the statute defines “high-risk” AI systems as artificial intelligence systems that make or are a substantial factor in making a consequential decision. The statute defines a "consequential decision” in the employment context as a decision that has a significant effect on the provision or denial of employment.
Beginning February 1, 2026, covered employers that use high-risk AI tools will have to assess the tools annually, develop an AI risk management policy, and notify employees and applicants about how they use AI. Colorado Governor Jared Polis signed the statute into law on May 17, 2024.
The new Colorado AI law does not provide a private right of action for people to sue. Instead, a violation will constitute an unfair trade practice under Colorado law, and Colorado’s Attorney General will have exclusive enforcement authority.