Complying with Colorado SB 24-205
What Employers Need to Do
Colorado has enacted the first U.S.-wide state law addressing “high-risk” artificial intelligence systems that impact consequential decisions — including employment opportunities.
The law takes effect February 1, 2026 for most obligations.
Who must comply?
You should act now if your company:
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Does business in Colorado (i.e., has Colorado residents as consumers/employees) and uses AI systems for decisions about employment or employment opportunities.
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Deploys “high-risk AI systems” — defined as those which make, or are a substantial factor in making, a consequential decision (e.g., hiring, promotion, termination) for Colorado residents.
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Develops or substantially modifies AI systems used for such decisions (since both developers and deployers are in scope).
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Uses AI systems that have potential for algorithmic discrimination based on protected characteristics (age, disability, race, veteran status, etc.).
What are the likely penalties for non-compliance?
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Violations under the Act are treated as unfair or deceptive trade practices under the Colorado Consumer Protection Act.
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Civil penalties up to $20,000 per violation/consumer transaction.
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Enforcement is by the Colorado Attorney General’s Office. No explicit private right of action (though this may evolve).
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Because the law covers employment decisions, regulatory risk combines with legal and reputational exposure for biased hiring tools or opaque decision-making.
What exactly must you do?
Key employer/deployer obligations include:
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Risk management policy & program: Adopt governance, processes and personnel to identify, assess, mitigate and monitor risks of algorithmic discrimination.
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Impact assessments: Prior to deployment and on at least an annual basis (or more frequently when modifications occur), evaluate system purpose, inputs, outputs, potential differential impacts, mitigation steps, and data sources.
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Transparency/notice to individuals: Disclose when a high-risk AI system is used in consequential decisions for employment (or other opportunities); explain how such decisions were made, allow data correction and human review of adverse outcomes.
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Documentation & disclosure to regulator: Maintain records, provide documentation to the Attorney General when algorithmic discrimination is discovered or reported (within 90 days).
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Ongoing monitoring: Conduct reviews to ensure the AI system isn’t causing unlawful bias, and take corrective action where necessary.
What can BiasSignal deliver for you?
We specialize in AI compliance, audit, fairness testing and inclusive hiring oversight. Here’s how we help you meet SB 24-205 requirements with confidence:
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Comprehensive readiness audit of your AI hiring systems (screening, assessment, ranking, decision automation) to identify whether any used system qualifies as “high-risk” under the law.
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Impact assessment deliverable: We prepare a documented, legally-aligned impact assessment that covers inputs, outputs, data sources, protected class analysis, differential impact metrics and remediation plan.
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Bias & fairness testing: Empirical testing of your AI tool(s) for disparate impact across age, race, disability status, veteran status, gender, national origin, etc.
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Transparency documentation: Templates and guidance for candidate notice, appeal rights, data correction opportunities, and human-review fallback design.
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Governance framework: We assemble your risk-management policy, processes, internal roles/responsibilities, audit trails, monitoring schedule — mapped to recognized frameworks (eg. NIST AI Risk Management Framework) to support the rebuttable-care defence.
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Regulator-ready reporting: We prepare mapping of documentation, disclosures, logs and remediation steps so you are ready if the Colorado AG requests information or initiates audit/enforcement.
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Future-proofing: Given the regulatory momentum (Colorado, New York City, other states, EU), our approach positions you not just for SB 24-205 compliance, but for a broader inclusive-hiring assurance program that aligns with disability/accessible hiring best practices.
Why act now?
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The law’s effective date is February 1, 2026: you must have policies and documentation in place ahead of that date.
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Audits, documentation, risk assessments and transparency processes require time, resources and change-management — delaying puts you at risk of last-minute scramble, higher cost and possible non-compliance.
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Organizations that proactively prepare gain competitive advantage: better candidate trust (especially for disability inclusion), reduced litigation/risk exposure, alignment with broader ESG/DEI goals.
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Failure to prepare can mean costly fines, regulatory scrutiny and damage to employer brand (especially among persons with disabilities or other protected classes).
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With BiasSignal at your side, your compliance journey becomes smoother, smarter and aligned with inclusive hiring — not just “check-the-box” compliance.
Let’s partner for compliance & inclusion
Contact us today to schedule your SB 24-205 readiness assessment. Let’s build a streamlined, defensible, inclusive AI hiring program – one that meets Colorado’s regulatory demands and advances your organization’s commitment to fairness, disability inclusion and high-quality talent outcomes.