What Colorado AI Law’s Major Rewrite Means For Employers | Proskauer Rose LLP

Colorado has signed a new law, S.B. 26-189, that repeals the previously enacted comprehensive artificial intelligence (AI) law before it took effect, replacing it with a narrower framework focusing on automated decision-making technology (ADMT).
The new law applies to ADMT used in consequential decisions affecting Colorado residents or individuals evaluated by Colorado-based businesses, but excludes certain tools like spell-checkers and data summarizers.
The original Colorado AI law required extensive governance structures, but S.B. 26-189 mainly imposes transparency obligations including notice, disclosure, recordkeeping, and human review without a private right of action.
Employers need to identify ADMT influencing employment decisions, especially in hiring, promotions, and performance management, to meet the new law’s requirements, effective January 1, 2027.
While the new law is narrower, it still mandates that employers disclose ADMT use, retain records, explain adverse decisions to applicants/employees, and allow for human review and correction requests.

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