Colorado Amends its Artificial Intelligence Law, Substantially Reducing Obligations on Employers

Colorado’s governor enacted an amendment to reduce the compliance burden on employers under its new AI law, with the law taking effect from January 1, 2027.
The CO AI Act applies to employers using “covered automated decision-making technology” for consequential employment decisions which are not routine or related to identity verification, cybersecurity, sanctions compliance.
The law requires employers to: give pre-use notice of ADMT use, implement an adverse action process, and retain records about ADMT for three years.
The CO AI Act clarifies developers’ and deployers’ liability for algorithmic discrimination in a consequential decision, holding each party liable for their relative fault.
Unlike previous Colorado law, the CO AI Act does not create a private right of action, and only empowers the state attorney general to enforce it.
Employers can benefit from the elimination of many additional, stricter requirements from previous Colorado AI laws.
The CO AI Act positions Colorado among a few U.S. states with comprehensive AI laws, while numerous bills are under consideration nationwide.

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