Dive Brief:
- Colorado’s legislature on Thursday passed a bill that would prohibit employers from discriminating against workers by setting individualized wages based on an algorithm that uses statistical modeling, data analytics, artificial intelligence or other data processing techniques to analyze surveillance data.
- The bill — which also applies to businesses’ use of consumer data to offer individualized prices — is intended to protect workers from wages that are strategically set based on surveillance data that includes browsing and purchase history, financial status and habits and affiliations, the Colorado House Democrats said in an earlier press release.
- If passed, the law will further cement Colorado’s position as a state at the forefront of restricting the use of AI in ways that could potentially harm workers.
Dive Insight:
According to the Colorado House Democrats’ release, corporations have increasingly “weaponized” wage setting to set wages as low as possible, using private data that is often collected without an individual’s knowledge or consent.
“Our online activity, not just what we post and buy, is being used to price-gouge us and intentionally offer low-ball salaries to pad the pockets of mega-corporations,” Rep. Javier Mabrey said in the Democrats’ release. “We’re pushing back against these deceptive practices to save Coloradans money, allow small businesses to stay competitive in the market and increase incomes for the hardworking people of our state.”
If passed, violators of the new prohibitions will be considered to be engaging in a deceptive trade practice under the Colorado Consumer Protection Act and would be subject to enforcement by the state attorney general.
The bill has met with some resistance from the business community. In a March letter to the Colorado House Business Affairs and Labor Committee, Travel Tech, an association of travel technology industry members, wrote to oppose the bill as written and offer changes, mainly due to consumer-facing elements. On Thursday, the Chamber of Progress, another tech-focused group, urged Gov. Jared Polis to veto the bill — also focused on the consumer stipulations.
In March, the Colorado Chamber of Commerce also raised concerns about the bill. “Because the definitions in the bill are so broad, they could capture common tools such as scheduling systems, HR software and performance analytics platforms,” it said.
The bill follows another controversial AI law passed by Colorado in 2024, which requires employers and other entities to take “reasonable care” to protect against algorithmic discrimination. Polis signed that bill with some concern, noting it could hamper development in the state.
Lawmakers in the fall delayed that law's implementation — which was originally set for February of this year — to late June, seeking more time to amend its particulars. It’s also seen legal action from Elon Musk’s xAI, although that lawsuit is on hold until Colorado lawmakers decide how to implement the law.
Polis has 30 days to sign or veto the surveillance bill from the time it hits his desk, and has not publicly indicated his plans. In April, however, a spokesperson for his office reportedly told The Denver Post he is concerned about policies that interfere with the free market.
If signed, the bill would take effect in August.
