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Colorado Enacts Artificial Intelligence Legislation 

Colorado has become a frontrunner in regulating artificial intelligence (AI) with the recent passing of Senate Bill 24-205, also known as the Colorado AI Act. This groundbreaking legislation aims to protect consumers from algorithmic discrimination and places specific requirements on employers who utilize AI tools in their decision-making processes. 

The law is designed to prevent the use of AI in a way that perpetuates bias against protected classes, such as race, gender, religion, or age. The legislation defines “high-risk” AI systems as those used to make significant decisions about individuals, including hiring, firing, promotions, or performance evaluations. 

Employers are required to take “reasonable care” to avoid algorithmic discrimination. This involves implementing risk management programs to assess potential bias within their AI systems. Before deploying high-risk AI, employers must conduct impact assessments to identify potential biases and develop mitigation strategies.  

The law also emphasizes transparency by requiring that employers disclose to applicants and employees how AI is used in the decision-making process and how they can challenge AI-based decisions. 

Next Steps 

The law is scheduled to take effect in February 2026 and compliance assistance guidance is expected from the state. In the interim, employers can take some proactive steps to ensure compliance by reviewing and identifying all AI tools used in their organization, particularly those involved in hiring, promotion, or performance evaluation; building a compliance plan that includes risk management procedures, impact assessments, and clear communication protocols; and consulting with legal counsel to ensure the organization’s AI governance is headed in the right direction. 

HR Works, headquartered in Upstate New York, is a human resource management outsourcing and consulting firm serving clients throughout the United States for over thirty years. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.