Colorado’s SB26-189 sets new rules for AI in employment decisions

Governor Polis has signed SB26-189 into law, establishing new regulations for the use of artificial intelligence in employment decisions across Colorado. This legislation applies to both developers and companies that use automated decision-making technology to influence consequential employment outcomes such as hiring, promotions, or compensation adjustments.

Employers are now required to provide clear notices to candidates and employees when automated systems influence major employment decisions. If a tool contributes to an adverse outcome, companies must provide a detailed disclosure within 30 days. This documentation must explain the decision-making process and outline how individuals can request information or corrections to inaccurate data used by the system.

The law introduces rights for individuals to contest outcomes. Applicants and employees may request a meaningful human review of decisions made by automated systems. This review must be performed by an authorized person who does not simply defer to the software output. While the legislation creates these new guardrails, it does not replace existing anti-discrimination laws. Instead, it adds a layer of transparency to the use of data in the workplace.

Businesses must maintain records for at least three years to demonstrate compliance with these requirements. The Colorado attorney general holds enforcement authority and will provide a 60-day window for companies to fix potential violations. Organizations should evaluate their current automated tools to determine if they meet the criteria for consequential decision-making and prepare for the upcoming rule-making process expected by January 2027.