Colorado is set to implement a revised Artificial Intelligence (AI) law, Senate Bill 26-189, on January 1, 2027. This legislation specifically addresses the use of “automated decision-making technology” (ADMT) in making critical employment decisions, including hiring, compensation, and other “consequential” actions. The law mandates that employers using such technologies must provide clear notices and disclosures to affected individuals, especially when ADMT plays a role in adverse employment outcomes.
Affected individuals will have the right to request their data, seek corrections, and demand a meaningful human review of decisions made or influenced by ADMT. This updated law replaces an earlier version that had raised concerns about hindering innovation. The Colorado attorney general is empowered with regulatory and enforcement authority, including a 60-day period for violations to be rectified before penalties are imposed.
CHROs Drive AI Integration
In parallel with legislative developments, Chief Human Resources Officers (CHROs) are increasingly at the forefront of AI transformation within organizations. The focus is shifting from traditional IT-led AI deployments to a more human-centric approach centered on change management. This involves actively working to enhance employees’ competence and confidence in using AI tools.
CHROs are also instrumental in redesigning existing workflows to incorporate AI effectively and in creating secure environments that encourage responsible AI integration. This strategic shift is partly a response to the growing phenomenon of ‘Shadow AI,’ which refers to the use of unsanctioned AI tools by employees.
Addressing ‘Shadow AI’ Concerns
The rise of ‘Shadow AI’ signals that employees’ needs for AI assistance may not be fully met by officially sanctioned tools. This can lead to significant risks, including potential data privacy breaches, the dissemination of inaccurate information, and compliance issues. The trend highlights an unmet demand for AI solutions that are both accessible and effective.
Managing ‘Shadow AI’ requires a proactive, enterprise-level strategy. Organizations are advised to inventory the AI tools employees are using, clearly communicate policies regarding AI usage, and pilot new AI solutions in controlled environments to assess their utility and risks. Crucially, involving leadership in establishing risk expectations and overseeing the pace of AI adoption is essential for ensuring that AI is integrated responsibly and strategically across the organization.
