Question 1

What is an AI impact assessment under Colorado SB24-205?

Accepted Answer

An AI impact assessment under Colorado SB24-205 is a documented pre-deployment evaluation that employers must complete before using a high-risk AI system for hiring or employment decisions. The assessment analyzes the tool's intended use, known limitations, training data, potential for discrimination, and mitigation steps. It must be completed before the tool is used on real candidates, not after.

Question 2

When does Colorado SB24-205 take effect?

Accepted Answer

Colorado SB24-205 takes effect June 30, 2026. Employers using high-risk AI systems in hiring or employment decisions must complete impact assessments and have compliant policies in place by that date. Employers who are already using covered AI tools should begin their assessments now to meet the deadline.

Question 3

What AI tools are considered high-risk under Colorado SB24-205?

Accepted Answer

Under Colorado SB24-205, a high-risk AI system is one that makes or substantially influences consequential decisions about individuals in employment contexts, including hiring, firing, promotion, demotion, or compensation. Resume screeners, video interview analysis tools, candidate scoring platforms, and AI-driven background check systems are all likely to qualify as high-risk when used for employment decisions.

Question 4

What must an AI impact assessment include?

Accepted Answer

A compliant impact assessment under Colorado SB24-205 must document: the AI system's intended purpose and deployment context, the types of data used to train and run the system, known limitations and potential for bias, testing methodology and results, steps taken to mitigate identified risks, how human review is incorporated into the decision process, and ongoing monitoring procedures. The documentation must be retained and made available to the Attorney General upon request.

Question 5

What are the penalties for violating Colorado SB24-205?

Accepted Answer

Violations of Colorado SB24-205 carry penalties of up to $20,000 per violation. The Colorado Attorney General has enforcement authority. The law also creates a private right of action for individuals who suffer discrimination resulting from a non-compliant high-risk AI system, which could expose employers to civil lawsuits beyond regulatory penalties.

Question 6

What is the 90-day AG notification requirement?

Accepted Answer

Colorado SB24-205 requires employers to notify the Attorney General within 90 days of discovering that a high-risk AI system has caused or is reasonably likely to have caused algorithmic discrimination. The notification must describe the nature of the discrimination, the affected population, the steps the employer is taking to remediate the issue, and any changes made to the AI system or its use.

Question 7

How is an impact assessment different from a bias audit?

Accepted Answer

An impact assessment is a pre-deployment activity — you complete it before using the AI tool for the first time. It focuses on the tool's design, data, and theoretical risks. A bias audit (required by NYC Local Law 144) is an ongoing, post-deployment activity that analyzes real outcomes from actual use. You compare selection rates across demographic groups based on real hiring data. Both are legally required if you use AI hiring tools in covered jurisdictions, and they serve different compliance purposes.

Question 8

Does the EU AI Act require impact assessments for hiring AI?

Accepted Answer

Yes. The EU AI Act classifies AI systems used in employment, particularly for recruitment, selection, promotion, and termination, as high-risk. High-risk AI systems require a conformity assessment before deployment, which includes technical documentation, risk management procedures, data governance review, and registration in the EU database. Multinational employers using AI hiring tools for EU-based employees must comply with EU AI Act requirements in addition to US state laws.

Question 9

What states beyond Colorado are likely to require AI impact assessments?

Accepted Answer

California has multiple bills pending that would require algorithmic impact assessments for employment decisions. Illinois is building on its existing AI Video Interview Act with additional impact assessment requirements. New York State (separate from NYC's LL144) and Maryland are in early legislative stages. The EU AI Act already applies to multinational employers with EU employees.

Question 10

How does EmployArmor help with AI impact assessment compliance?

Accepted Answer

EmployArmor's AI Impact Assessment tool guides employers through a step-by-step assessment wizard for each AI hiring tool in use. It classifies tool risk under Colorado SB24-205 definitions, generates compliant documentation, tracks the 90-day AG notification window if issues are discovered, and stores all assessment records in an archive for regulatory review. It also covers EU AI Act requirements for multinational employers in the same workflow.

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