Colorado lawmakers have voted to delay the effective date of the state’s Artificial Intelligence Act (SB 24-205) from February 1, 2026, to June 30, 2026. While that four-month reprieve offers employers more time to prepare, it doesn’t eliminate the law’s obligations, or the debate surrounding them.
The extension comes after yet another failed attempt to reach consensus on how the law should function. During the six-day special session convened by Governor Jared Polis, two competing proposals, one focused on enhanced transparency and the other on real-time disclosures, collapsed under pressure from industry groups, labor advocates, and consumer protection organizations unable to agree on scope, liability, and enforcement mechanics. What remained was a well-worn fallback: delay the deadline and try again later.
Inside the Special Session
Polis called the special session primarily to address a billion-dollar budget shortfall triggered by passage of H.R. 1, ‘The One Big Beautiful Bill Act.’ But the session also reopened discussion of Colorado’s AI law, a statute the governor had previously signed with reservations, citing concerns about the law’s complexity, ambiguity, and potential chilling effect on innovation.
Senate Majority Leader Robert Rodriguez, the law’s original sponsor, returned with a revised bill that would have replaced SB 24-205’s structured risk-assessment regime with a broader framework focused on consumer disclosures, correction rights, and developer/deployer accountability. That proposal gained traction among labor unions and consumer groups but met fierce resistance from the tech sector. Meanwhile, a competing bill backed by Representative William Lindstedt aimed to delay implementation while preserving the core elements of the law.
By Sunday evening, the two camps appeared to have reached a tentative compromise that would preserve the February 1 start date for certain consumer-facing disclosures while phasing in other requirements. But that framework unraveled within 24 hours, with Rodriguez ultimately focusing his bill on a single purpose, extending the deadline.
The amended version passed easily, 48-14 in the House and 29-3 in the Senate, and was signed shortly after. It pushes the AI law’s compliance date to June 30, 2026, giving stakeholders another legislative cycle to refine or reshape the statute.
What the Law Still Requires
Colorado’s AI Act remains the most comprehensive state-level AI law enacted in the United States. It governs both developers and deployers of “high-risk” artificial intelligence systems, including those used to influence consequential decisions about employment, housing, education, lending, and insurance.
For employers, the law applies when AI is used to make, or significantly influence, decisions related to hiring, promotion, compensation, or termination. Under the current structure, deployers must establish risk management policies, conduct annual impact assessments, and retain compliance documentation for at least three years. They must also notify individuals when AI meaningfully influences a decision, offer an explanation, provide an appeal process with meaningful human review where feasible, and publish a public statement about their use of high-risk AI.
Enforcement authority rests with the Colorado Attorney General. There is no private right of action. However, violations are treated as unfair or deceptive trade practices under the Colorado Consumer Protection Act. The law also offers a structured affirmative defense for organizations that discover and cure violations and can demonstrate adherence to recognized governance frameworks.
None of that has changed; only the deadline has.
A Cautious Path Forward
The latest delay should not be mistaken for a policy shift. Rodriguez has remained consistent in defending the law’s consumer protection provisions, and opposition to outright repeal remains strong within the legislature. While future amendments are likely, particularly around definitions, small business exemptions, and liability exposure, employers should not assume that the statute’s core obligations will be dismantled.
The risk, instead, is one of miscalibration. Those that postpone compliance preparation entirely could find themselves racing the clock if lawmakers are unable to coalesce around a new framework before the June deadline. On the other hand, overinvesting in the current version of the law could lead to wasted resources if critical requirements are softened or removed.
The most prudent strategy lies somewhere in the middle.
Employers should begin mapping where AI systems are deployed in the hiring process and assessing whether those systems meaningfully influence outcomes. Procurement and legal teams should initiate conversations with vendors to understand how AI tools function, whether human review is embedded, and what documentation is available to support transparency and bias mitigation. Impact assessments, appeals procedures, and consumer notices can be scoped now, without finalizing materials that may shift next session.
Equally important is internal coordination. Assigning ownership over AI compliance, whether through legal, HR, or a dedicated privacy function or algorithmic integrity lead, will help organizations respond quickly to any changes in the law’s scope or enforcement priorities.
Parting Thoughts
Colorado’s decision to delay its AI law offers breathing room, not immunity. The countdown clock now runs to June 30, 2026, but the underlying compliance challenge remains the same. Employers using AI to support employment decisions will need to ensure that those systems operate transparently, fairly, and with meaningful human oversight.
The next several months may bring more legislative proposals, lobbying efforts, and public debate. But for now, Colorado’s AI law still stands. Employers would be wise to treat this delay as a narrow window to prepare, not a reason to pause.