Colorado gutted its AI hiring law. Washington state didn't
Not legal advice. This article discusses legal and regulatory developments and is generated with AI assistance under human editorial review. It is provided for informational purposes only and does not constitute legal advice. Laws and regulations vary by jurisdiction and are subject to change. You should consult your own qualified legal counsel before taking or refraining from any action based on the content of this article. Read our AI Transparency statement.
The News
Colorado, which was the first US state to pass comprehensive AI legislation affecting hiring decisions, has significantly scaled back its law after pushback from employers and technology vendors. The original law would have required employers using AI for hiring to conduct annual bias audits, notify candidates about automated decision-making, and provide opt-out mechanisms. The gutted version substantially narrows these obligations.
Meanwhile, Washington state is moving in the opposite direction. Lawmakers there have advanced a bill that would impose broad restrictions on the use of AI in employment decisions, including requirements for impact assessments, transparency disclosures to candidates, and a private right of action for individuals who believe they have been harmed by an AI-driven hiring decision. The Washington bill is considered one of the most far-reaching state-level AI employment laws currently in play.
The divergence means that employers operating across multiple states face an increasingly complex compliance landscape. What is permissible in Colorado may be prohibited in Washington, and several other states — including New York, California, and Illinois — have their own AI-in-hiring bills advancing through various legislative stages.
Why It Matters
For TA leaders in large enterprises, the regulatory fragmentation around AI in hiring is no longer a future risk — it is a present compliance headache. If your organisation operates nationally or has remote workers in multiple states, you cannot apply a single AI screening policy across the board. The Colorado rollback might tempt some teams to relax their governance, but Washington's more aggressive stance suggests that the regulatory pendulum is swinging in different directions depending on the state.
The safest course is not to bet on which direction the pendulum will settle, but to build AI hiring practices that would pass the strictest regime on the table. That means documenting every AI tool used in the hiring pipeline, conducting bias impact assessments proactively rather than reactively, and ensuring that candidates can request human review of automated decisions — regardless of which state they are in.
Taking Action
All action is situated in your corporate context. These are starting points, not prescriptions — choose what fits.
Connect
Who to talk with in your enterprise
Your legal and compliance team — Map every state where you currently hire and identify which ones have active AI-in-employment legislation. The Washington and Colorado cases show how fast this landscape shifts.
Your HR technology lead — Request a vendor compliance report from each AI-powered tool in your hiring stack, confirming whether the tool meets Washington's proposed impact-assessment and transparency requirements.
Your head of TA operations — Document your current AI-in-hiring inventory — every chatbot, screening tool, matching algorithm, and ranking system — and flag which ones would trigger notification or audit obligations under the strictest state law you face.
Inspect
What to take a closer look at
Review your current AI vendor contracts for indemnification clauses related to regulatory compliance. Many vendors pushed responsibility for compliance onto customers during Colorado's original law, and those same terms may leave you exposed under Washington's broader regime. Specific tool to look at: your vendor risk management database or procurement system's compliance tracking module.
Reflect
What to think about more deeply
The most interesting question isn't whether Colorado or Washington has the better approach to regulating AI in hiring — it's whether a federal standard will arrive before the state-by-state patchwork becomes unmanageable for employers, and whether TA leaders should be lobbying for one. Is a single imperfect federal law preferable to fifty conflicting ones?