Colorado Creates AI Obligations for Employers
Beginning June 30, 2026, the Colorado Artificial Intelligence Act (CAIA) will require employers to take certain steps to protect applicants and employees in the state from algorithmic discrimination—that is, discrimination by artificial intelligence (AI) systems they use to make employment-related decisions. Below are the highlights.
The CAIA will apply to employers of all sizes that do business in Colorado and use AI systems that make, or help make, significant employment-related decisions. An example would be an employer that uses an AI applicant tracking software that automatically screens out applicants prior to human review.
As the law is currently written, covered employers will have significant duties, including, but not limited to:
Implementing an AI risk management policy and program
Conducting annual AI impact assessments and reassessing within 90 days of certain modifications to the AI system
Evaluating the AI system at least annually to ensure it isn’t causing discrimination
Notifying applicants and employees about the AI system, including about any adverse decision it made that affects them
Posting specific notices (public disclosures) about the AI system on their website
Notifying applicants and employees who interact with the AI system that they are interacting with AI
The law contains certain exceptions, most notably one for employers with 49 or fewer full-time equivalent employees that don’t use their own data to train or improve their AI system (if you don’t know whether you do this, we recommend checking with the provider of your AI system). These employers don’t have to implement a risk management program, conduct impact assessments, or post public disclosures. However, they’re still obligated to exercise reasonable care to protect against risks of algorithmic discrimination.
The governor has urged lawmakers to further improve and fine-tune the law before its effective date, so these requirements may change. We’ll continue to track any changes to the law that affect employers and will post another alert if there are significant updates. Currently these requirements are based on SB 24-205 signed by the governor on May 17, 2024 and SB 25B-004 which was was signed by the governor on August 28, 2025.