Skip to the main content.
New! Continuous MVR monitoring
Driving record monitoring

Ongoing monitoring of driving records can help employers avoid risk and improve driver safety. Learn about the benefits of adding Verified Credentials' newest solution to your screening strategy.

Read the blog ›

Featured resource

Industry-Trends-Report-01

Learn the latest trends in employment background checks. This report uses real-life usage data to uncover how employers are screening across industries.

Download the full report ›

Verified Credentials is a leading background screening company. Since 1984, we’ve helped validate and secure relationships through the use of our comprehensive screening solutions. We offer a wide variety of background checks, verifications, and innovative screening tools.

Get to know us ›

Accredited background screening solutions

Logo-PBSA-Accreditation-120x98

Our accreditation confirms that our policies, processes, and employee training meet rigorous industry compliance standards.

Learn about our solutions ›

2 min read

Colorado's AI Business Regulations: A First in the U.S.

As we continue to learn and understand the wild digital frontier of Artificial Intelligence (AI) in the workplace, regulations are still taking form. The Federal Government previously addressed the safe and ethical use of AI with the Executive Order on AI in October 2023.

On May 17, 2024, Colorado Governor Jared Polis signed Consumer Protections for Artificial Intelligence, or SB 24-205, into law. This marks a significant milestone in consumer protection in interactions with AI for Colorado, which may set an example to follow in other states.

 

What is SB 24-205?

It is important to note that Colorado is one of many states that have addressed the responsible use of AI. For example, Utah's Artificial Intelligence Policy Act already went into effect on May 1, 2024, requiring disclosure obligations whenever someone interacts with AI. However, Colorado is the first to enact a broader, more comprehensive set of rules and restrictions on private companies using AI state-wide.

The legislation is an addition to Title 6 of the Colorado Consumer Protection Act, which will go into effect on February 1, 2026. SB 24-205 aims to prevent algorithmic discrimination affecting "consequential decisions," including employment-related decisions used by private businesses. The law intends to ensure that Colorado businesses act responsibly and promote fairness and transparency for consumers and employees.

 

Key points employers need to know

SB 24-205 involves a broad spectrum of regulations that can affect the employment process and general business practices in Colorado. Here are some key points of the law:

  • Developer Responsibility: Developers of high-risk AI systems must take steps to protect consumers from potential AI discrimination.
  • Consumer Rights: Deployers of high-risk AI systems must inform consumers about their right to opt out of personal data processing.
  • Adverse Decisions: Deployers must provide consumers with a statement explaining the main reasons for any adverse decisions made by a high-risk AI system, including the degree to which they used AI to make the decision.
  • Public Disclosure: Deployers must post a public statement on their website about the types of high-risk AI systems they use, how they manage discrimination risks, and the nature and extent of information collected.
  • AI Interaction: When an AI system is designed to interact with Colorado consumers, the deployer or developer must inform each consumer that they are interacting with an AI system.
  • Consumer Appeal Rights: Colorado consumers have the right to correct incorrect personal data used in consequential decisions and to appeal adverse decisions. When possible, the appeal process must allow for human review.

The bill does, however, allow exceptions for certain deployers, such as small businesses with fewer than 50 employees, and permits withholding trade secrets or legally protected information. Take a closer look here for the full details and original text.

 

Potential future restrictions on the use of AI

Colorado's new law has the potential to set a precedent for future legislation in other states detailing and addressing responsible AI on a larger scale. It highlights the need for transparency, fairness, and accountability in AI systems, particularly those used in employment decisions. Other states are quickly proposing and enforcing policies to combat potential safety and privacy risks associated with the misuse of AI, too. California, Connecticut, and Virginia have also proposed similar laws in 2024.

As AI becomes more widely integrated into HR processes and new laws emerge to address safety, privacy, and transparency, understanding and complying with rules governing the responsible use of AI will become increasingly important. Employers using AI in their hiring practices should consult with their legal counsel to review any laws or governance that may affect the use of AI during any part of the employment process. Verified Credentials will attempt to provide updates on AI regulations across the United States as they become available.

Illinois Becomes the Second State to Enact Broader Regulations on AI

Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...

Read More

Montana’s 2024 Consumer Data Privacy Act

Montana has joined the growing list of consumer data privacy laws enacted throughout the country, creating new guidelines for consumer data privacy. ...

Read More

New Background Check Requirements for Health Professionals in New Jersey

Signed into law on September 12, 2024, New Jersey enacted a new background check bill that mandates criminal history background checks for a broader...

Read More

Colorado’s Clean Slate Act Goes into Effect

As of July 1, 2024, Colorado’s Clean Slate Act, or Senate Bill 22-099, is officially in effect.This comes in the wake of several other states that...

Read More

Colorado Introduces Bill to Automatically Seal Some Records

You may be familiar with sealed criminal records. Generally, sealed records are not accessible with a public record search.

Read More

Colorado Bill Impacts Using Juvenile Court Records

Businesses and individuals continue to deal with the economic impact of the COVID-19 pandemic. Governments all over the country found quick fixes for...

Read More