Colorado rewrote its AI law. One part of it is about you.
What just became possible
The law you may have heard about last year is gone. The replacement takes effect January 1, 2027, and for a Denver contractor the exposure is not where you would guess.
This one is less fun than the rest of this month, but it is local and it has a date on it, and I would rather you hear it early than late.
Colorado passed the country's first broad AI law back in 2024. It was set to take effect this past June. That is not what happened. The legislature replaced it entirely with Senate Bill 26-189, and the new one takes effect January 1, 2027.
The new version is lighter than the original. It is built around disclosure and transparency rather than a general duty of care. But it still applies to businesses using automated systems to make what the law calls consequential decisions, in areas like employment, housing, financial services, insurance and healthcare.
The part that matters for a contractor
Here is the piece I have not seen anybody explain to owners.
The law expressly covers Colorado employees and job applicants. Your customer side is probably fine. You are not using AI to decide who gets a mortgage. Hiring is the exposure.
And hiring is exactly where AI has quietly crept into small businesses over the last two years. If you are using something that screens applicants, scores resumes, ranks candidates or runs an automated first interview, you are in the neighborhood of this law.
Broadly, what the statute asks for is notice before an automated system is used in a consequential decision, and an explanation afterward in plain language when the outcome is adverse, within thirty days, including information about the person's right to meaningful human review.
None of which is exotic. It is close to what a decent employer would want to do anyway.
Two things I want to be clear about
I am not a lawyer and this is not legal advice. The Attorney General still has to write the implementing rules, and details will move between now and then. If you are screening applicants with software, the person to ask is an employment attorney, and it is worth an hour of their time this fall rather than a scramble next December.
The second: the reason to look now is not fear. It is that you have sixteen months, which is a comfortable amount of time to get something right and a very uncomfortable amount of time to discover you got it wrong.
The businesses that handle this well will be the ones that started while it was still boring.
What to do this quarter
- Write down every tool touching your hiring process. Job boards with matching, resume screeners, scheduling bots, anything that filters or ranks a person.
- For each one, find out whether a human actually reviews before a candidate is rejected. That is the question that matters most.
- Book an hour with an employment attorney this fall. Bring the list.
- Set a reminder for spring 2027 to check what rules the Attorney General published.
Colorado Governor Signs SB 189 · Holland & Knight
Impacts and Implications for Employers · Epstein Becker Green
Colorado's New AI Act · Ogletree Deakins
Not sure if this touches you
Send me your hiring stack
I will tell you which tools are worth asking an attorney about. I am not one, so that is where it stops, but it will save you the hour of figuring out what to ask.
Book a free auditBen In Denver · Englewood, CO · The engine is running
