A woman applying for a job online illustrates algorithmic discrimination

This is a free excerpt from one of Shortform’s Articles. We give you all the important information you need to know about current events and more.

Don't miss out on the whole story. Sign up for a free trial here .

What role does AI play in your daily interactions with businesses and institutions? How can algorithmic discrimination affect your chances of getting a job, loan, or housing?

AI systems are increasingly making decisions that impact our lives, from job applications to loan approvals. The growing concern over algorithmic discrimination has prompted states such as Colorado to create laws protecting individuals from unfair AI-driven outcomes.

Keep reading to discover how new legislation aims to make AI systems more transparent and fair for everyone.

AI Algorithmic Discrimination Legislation

Algorithmic discrimination occurs when AI systems unfairly impact individuals based on race, gender, age, disability, or other legally protected statuses. It often stems from biases in algorithm design or data that AI uses.

In many everyday situations, such as applying for a job, loan, or home, AI algorithms play a significant role—for instance, ranking, advancing, or rejecting applications. These decisions can be tainted by underlying biases in AI systems. But, in most US states, companies don’t have to disclose their use of AI, making their decision-making processes opaque to the average person.

AI algorithmic discrimination laws are designed to counteract biases in AI systems. They target AI models used in critical sectors like employment, finance, health care, and housing, aiming to combat algorithmic discrimination and promote fairness in automated decision-making processes.

Colorado’s Groundbreaking Legislation

Colorado passed the first U.S. state law (CAIA) addressing AI algorithmic bias in May 2024. Taking effect in February 2026, the law regulates high-risk AI systems in various sectors including education, employment, and healthcare. The legislation has three main requirements:

  1. Transparency in how AI systems make decisions
  2. Regular audits to prevent discrimination
  3. Public reporting of audit results and discrimination risks

While supporters say the law will increase transparency and protect individuals from AI discrimination, Governor Polis expressed concern that complex compliance requirements might hamper innovation, suggesting federal regulation would be more effective.

Algorithmic Discrimination Legislation in Other States

While Colorado leads the way with CAIA, several other states are also legislating against algorithmic discrimination:

  • California’s HB 2930 aims to prohibit employers’ discriminatory ADT deployment, requiring annual impact assessments and notifications to those impacted by the tools’ use. Exemptions apply to businesses with fewer than 25 employees. If passed, enforcement will begin in 2026.
  • Georgia’s HB 890 seeks to extend anti-discrimination laws to cover AI or ADTs, prohibiting their use as a defense against discrimination claims. The bill doesn’t specify a start date.
  • Hawaii’s HB 1607 proposes banning discriminatory ADT use by employers, mandating yearly impact assessments, and requiring notifications for those impacted by the tools’ use. Companies with fewer than 50 employees are exempt. The bill doesn’t establish a start date.
  • Illinois’ HB 5322 would require annual evaluations for employers using AI systems, exempting those with fewer than 50 employees. If passed, this law will take effect in 2026.
  • Washington’s HB 1951 aims to ban discriminatory ADT use by employers, requiring yearly impact assessments, and mandating notifications to applicants and employees. It exempts businesses with fewer than 50 employees and will be implemented in 2025 if passed.

What’s Next

Experts say that, as more states consider AI discrimination legislation similar to Colorado’s, employers should prepare for the substantial compliance demands that will come with the likely passage of tighter regulations nationwide. They can do this by: 

  • Establishing strong AI risk management strategies. 
  • Regularly assessing and ensuring that their AI systems aren’t causing unfair or discriminatory outcomes.
  • Providing transparent, understandable information about how their AI systems operate and make decisions. 
AI Algorithmic Discrimination Legislation: Colorado Leads the Way

Want to fast-track your learning? With Shortform, you’ll gain insights you won't find anywhere else .

Here's what you’ll get when you sign up for Shortform :

  • Complicated ideas explained in simple and concise ways
  • Smart analysis that connects what you’re reading to other key concepts
  • Writing with zero fluff because we know how important your time is

Elizabeth Whitworth

Elizabeth has a lifelong love of books. She devours nonfiction, especially in the areas of history, theology, and philosophy. A switch to audiobooks has kindled her enjoyment of well-narrated fiction, particularly Victorian and early 20th-century works. She appreciates idea-driven books—and a classic murder mystery now and then. Elizabeth has a blog and is writing a book about the beginning and the end of suffering.

Leave a Reply

Your email address will not be published. Required fields are marked *