Colorado SB 24-205 (effective February 1, 2026) is the Colorado AI Act, regulating employers' use of automated decision systems (ADS) in consequential employment decisions affecting Colorado residents. It applies to all employers regardless of size — there is no minimum employee threshold. The law requires: notice to candidates and employees when an ADS is used in a consequential employment decision, including a description of what the ADS evaluates and how it impacts the decision; an algorithmic impact assessment for high-stakes ADS tools (hiring, termination, promotion) evaluating differential impact across protected characteristics, accuracy, and validity; and disclosure upon request of what factors the ADS evaluates and the weight assigned to each. Unlike NYC LL144, SB 24-205 has no size threshold and covers a broader range of automated tools. EmployArmor automates SB 24-205 compliance — generating jurisdictionally accurate ADS notices, coordinating impact assessments, and maintaining the required disclosure records — alongside LL144 and AIVIA obligations.
Last updated: March 2026
AI Hiring Compliance Tools Compared
| Tool / Approach | AEDT Inventory | Bias Audit Coordination | Notice Generation & Delivery | Multi-State |
|---|---|---|---|---|
| EmployArmor | Automated catalog | Yes — third-party auditor coordination | Automated templates + delivery + audit log | NYC, IL, CO, CA pending |
| ATS Compliance Modules | Manual entry | External — not built in | Varies by vendor | Limited / add-on |
| Clio | Not applicable | Advisory only | Document templates only | Manual research |
| Manual Process | Spreadsheets / ad hoc | Outsourcing required | Email / Word templates | Error-prone at scale |
How EmployArmor Handles Colorado SB 24-205 Compliance
- 1
Identify All ADS Tools in Your Employment Processes
EmployArmor inventories every automated decision system used in hiring, promotion, termination, and disciplinary decisions — mapping each tool to the ADS definition under SB 24-205 and flagging which Colorado candidates are affected.
- 2
Generate and Deliver SB 24-205 ADS Notices
For each Colorado candidate subject to an ADS, EmployArmor generates the required SB 24-205 disclosure — describing what the ADS evaluates and how it impacts the employment decision — and delivers it at the legally required time with proof of delivery captured in the compliance log.
- 3
Coordinate Algorithmic Impact Assessments
For high-stakes ADS tools, EmployArmor connects employers with independent assessors or the Colorado Office of Information Technology to conduct the required algorithmic impact assessment, tracking completion and renewal deadlines centrally.
- 4
Maintain Disclosure Records for Individual Requests
When a candidate or employee requests information about what factors an ADS evaluated and the weight assigned to each, EmployArmor retrieves the relevant tool specification data and generates the required disclosure response within the legally mandated timeframe.
- 5
Monitor Regulatory Updates and Alert for Changes
As Colorado issues additional guidance on SB 24-205 implementation, or as new state ADS laws take effect, EmployArmor updates its compliance logic and alerts employers to any new required actions.
By the Numbers
$500–$1,500
Per day, per violation — NYC DCWP civil penalties for LL144 non-compliance. Colorado penalties are assessed case-by-case by the Attorney General but can be substantial.
Jan 1, 2026
Illinois AIVIA takes effect, requiring consent before AI video interview analysis — a different obligation from SB 24-205 ADS notice requirements but equally mandatory.
Feb 1, 2026
Colorado SB 24-205 takes effect — the first state law specifically regulating ADS in employment, applying to all Colorado employers regardless of size.
Pending
California AB 2930 (pending) would add ADS requirements for California candidates, with timing dependent on Sacramento legislative progress.
Frequently Asked Questions
What is Colorado SB 24-205 and who does it apply to?
SB 24-205 (the Colorado AI Act) regulates employers' use of automated decision systems in consequential employment decisions about Colorado residents. It applies to any employer regardless of size — no minimum employee threshold exists.
What does SB 24-205 require employers to do?
Three requirements: (1) notice to candidates when an ADS is used in a consequential decision, including what the ADS does; (2) an algorithmic impact assessment for high-stakes ADS tools; and (3) disclosure upon request of what factors the ADS evaluates and the weight assigned to each.
What is the difference between a bias audit and an algorithmic impact assessment?
A bias audit under LL144 measures disparate impact by sex and race/ethnicity. An algorithmic impact assessment under SB 24-205 is broader — covering differential impact across all protected characteristics plus accuracy and validity — and must be reviewed by an independent party or the Colorado Office of Information Technology.
Does SB 24-205 apply to small businesses in Colorado?
Yes. Unlike LL144, SB 24-205 has no size threshold. Any employer using an ADS in hiring, promotion, or termination decisions about Colorado residents — including sole proprietors — may be subject to its requirements.
What are the penalties for non-compliance with SB 24-205?
Enforced by the Colorado Attorney General. Penalties include injunctive relief, corrective action, and civil penalties. The law also creates a private right of action for individuals harmed by ADS-related discrimination.
How does SB 24-205 interact with other AI hiring laws?
SB 24-205 operates alongside NYC LL144 and Illinois AIVIA. The requirements are not interchangeable — a disclosure satisfying LL144 does not satisfy SB 24-205. EmployArmor maps each candidate's location to applicable requirements and generates jurisdiction-specific compliance actions.
Automate SB 24-205 compliance alongside LL144 and AIVIA — run a free compliance scan.
References
- NYC Administrative Code § 20-871–20-875 (Local Law 144 of 2021). NYC Dept. of Consumer and Worker Protection
- Illinois Artificial Intelligence Video Interview Act (820 ILCS 42). Illinois General Assembly
- Colorado SB 24-205, "Consumer Protections for Artificial Intelligence" (2024). Colorado General Assembly
- EEOC Technical Assistance, "The ADA and AI to Assess Job Applicants" (May 2022). U.S. Equal Employment Opportunity Commission