Colorado Employers: A Highly Anticipated Update for You:
Colorado’s comprehensive AI law (the “CO AI Law”), originally set to take effect June 30, 2026, has been stayed by a federal magistrate judge following a constitutional challenge brought by xAI and supported by the DOJ, and the Colorado Attorney General has agreed not to enforce it.
Meanwhile, Colorado lawmakers have passed SB 26-189, which would repeal and replace the CO AI Law with a narrower framework focused on “automated decision-making technology” (ADMT), imposing primarily notice, disclosure, and recordkeeping obligations rather than the original law’s more burdensome risk management and impact assessment requirements.
The replacement bill, expected to be signed by Governor Polis, would take effect January 1, 2027, and would apply where ADMT materially influences “consequential decisions” in areas like employment.
As a result, employers now have clarity that the CO AI Law will not be enforced as written, though the replacement legislation could itself face legal challenges in the ongoing xAI litigation.
We encourage you to begin preparing for the likely enactment of the narrower replacement framework. Please reach out with any questions about how these changes may affect your organization.