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In our recent post, AI Regulation on Hold in Colorado—But Employer Risk Isn’t, we flagged that delay did not mean diminished risk. That continues to hold true. Colorado has now approved a comprehensive rewrite of its AI law, while Illinois regulators are advancing practical disclosure requirements for employers using AI in employment decisions.

The direction is clear: AI oversight in the workplace is moving forward—and becoming more operational.

Colorado: Recalibration, Not Retreat

Colorado’s rewrite reflects an effort to make its AI framework more workable—but not less relevant for employers.

Key points:

  • Employment uses remain in scope: AI tools used in hiring, promotion, and other employment decisions continue to be treated as “high risk.”
  • Governance expectations remain: Employers will still need risk management and oversight frameworks.
  • Transparency still matters: Notice and documentation obligations continue, even as details evolve.

Takeaway: Colorado is refining its approach, not stepping back. Employers should expect continued compliance obligations—just with clearer contours. For further details on the rewrite, please see our colleagues’ post, Colorado Legislature Approves Comprehensive Rewrite of State AI Law.

Illinois: A Practical Preview of Compliance

At the same time, Illinois is showing what compliance may look like on the ground.

Proposed regulations from the Illinois Department of Human Rights would require employers to:

  • Notify applicants and employees when AI is used in decisions such as hiring, promotion, discipline, or termination
  • Provide meaningful detail, including:
    • The AI tool used
    • The decisions it impacts
    • The types of data considered
    • Contact information for questions and accommodations

The proposal is now open for a 45-day public comment period.

Takeaway: Illinois emphasizes employer accountability for AI—requiring clear disclosures, structured internal processes, and transparent communication with employees.

Bottom Line

Colorado’s rewrite and Illinois’ proposed rules underscore the same theme: AI regulation for employers is not slowing down—it is taking shape. Beyond Colorado and Illinois, a broader state-level trend is taking shape. California, New York City, Texas, and others are advancing overlapping requirements around disclosure, bias auditing, and employee notice—while states like Connecticut and Washington are actively developing similar frameworks. The challenge now is not whether to prepare, but how to build scalable, practical frameworks that will hold across jurisdictions. Please contact your Baker McKenzie lawyer for more.