Your Knockout Questions May Now Be Regulated as AI

Every recruiter has built knockout questions. "Are you authorized to work in the U.S.?" "Do you have a valid driver's license?" "Can you work weekends?" Give the wrong answer, and the applicant tracking system moves the application to the reject pile before a person ever sees it. HR has used knockout questions for twenty years. Most of us don't think of them as AI.

Colorado may disagree. On January 1, 2027, the Colorado Automated Decision-Making Technology Act (SB 26-189) takes effect. Its definition is broad enough to reach a rules-based filter in your ATS, and the Attorney General is writing the rules that will settle the question right now. The public hearing is October 26.

What the Law Covers

SB 26-189 replaced the original Colorado AI Act (SB 24-205) before that law ever took effect. The new version drops impact assessments and risk-management programs. What it keeps is a set of transparency duties for any employer that uses automated decision-making technology (ADMT) to "materially influence" a consequential decision about an applicant or employee. Hiring, promotion, pay, discipline, and termination all count.

The law defines ADMT as technology that processes personal data and uses computation to produce outputs such as predictions, scores, rankings, or classifications that are used to make or assist a decision about a person.

Read that with a knockout question in mind. The applicant's answer is personal data. The ATS applies a rule to it. The output is a classification: qualified or disqualified. That classification decides whether a human ever reviews the application.

Why Knockouts Look Like ADMT

Four details in the law and the Attorney General's draft rules point the same direction.

First, the definition turns on computation and output, not on whether the tool is "intelligent." The law carves out spreadsheets that don't use machine learning and still require human analysis. The drafters knew how to exclude simple tools, and they drew that exclusion narrowly.

Second, the AG's draft rules describe an output that "constrains an option set, sets a threshold, or produces a rank." Setting a threshold is the entire purpose of a knockout question.

Third, the draft rules address automatic denials directly in the explanation an employer owes an applicant after an adverse outcome. They also include an employment example of an applicant "removed from an employment applicant pool pre-interview due to incomplete information." That's one step from a knockout question.

Fourth, the draft rules treat getting screened out before the interview as an adverse outcome, not only losing the job at the end. The law covers decisions about a person's "selection for" employment. The draft rules give the example of an employer whose tool picks 10 of 87 applicants for interviews, and they treat the 77 who weren't picked as owed adverse-outcome disclosures. They also presume material influence when a tool's output is "used to screen data made available to the decision maker." If missing the interview shortlist is an adverse outcome, an auto-reject before any human sees the application is one too.

The Counterargument

There is a reasonable case the other way. The law excludes tools that only organize, route, or present information for human review, and the materiality standard excludes incidental or clerical uses. If your ATS flags knockout answers but a recruiter still opens every application and makes the call, you have a stronger argument that the tool organizes information rather than decides.

That argument weakens the more your process depends on the auto-reject. If 400 people apply, the system rejects 300 on knockouts, and no one looks at those 300, a human didn't make that decision. The software did.

Human involvement later in the process doesn't fix it either. In the draft rules' promotion examples, a hiring manager sees the tool's scores, interviews every candidate, and still faces a presumption that the tool materially influenced the choice. The employer has to prove the decision rested on the manager's independent review.

The same logic applies to job boards. At an HRCI webinar I attended this week, an attendee asked whether a job board that automatically groups applicants as "unqualified" based on the employer's screening criteria counts. The speaker's answer: err on the side of caution and disclose. I agree, and the reasoning above is why.

What Changes if Knockouts Count

Notice is the easy part. The law requires clear and conspicuous notice before you use covered ADMT, and a statement in your job posting or application can satisfy it.

The adverse-outcome duty is the hard part. A Colorado applicant who receives an adverse outcome is owed a plain-language explanation of the decision and the technology's role in it within 30 days, along with the right to correct inaccurate data and to request meaningful human review. The proposed rules call for a trained reviewer with authority to override the result, acknowledgment of a review request within 10 days, and a completed review within 45.

Now apply that to volume. A small employer posting a high-volume hourly role can screen out hundreds of Colorado applicants a month on knockouts. If knockouts are covered, every one of those rejections is an adverse outcome with its own disclosure clock. Most ATS rejection emails don't come close to that standard.

Your vendor doesn't absorb this for you. The employer using the tool is the "deployer" under the law and stays liable for its own decisions. The law also voids contract clauses that indemnify a party for its own discriminatory acts.

Why October 26 Matters

The Attorney General has to define "materially influence" by rule. The draft rules don't include the safe harbors or bright-line indicators employers asked for, and they leave common screening tools to a fact-specific analysis. Whether a rules-based knockout filter is in or out is exactly the kind of question the final rules can answer.

If you use knockout questions for Colorado hiring, tell the AG's office how you use them and ask for a clear answer. The draft rules include employment examples about ranking and removing applicants, but none about knockout or minimum-qualification questions. Comments from HR practitioners who run real hiring processes are the input this rulemaking needs.

How to Submit Written Comments

1. Write your comment as a Word document or PDF. The form accepts a file upload, not typed text. Note: your comments will be public.
2. Go to the AG's ADMT Act and Chatbot Safety Act comment form.
3. Enter your name and contact information, choose a commenter category, and check the "ADMT Act" topic box.
4. Upload your file, accept the public-records acknowledgment, and submit.

The deadline is 11:59 p.m. on Monday, October 26, 2026. If the hearing runs past that date, comments stay open through its last day. Comments are public: the AG posts them on coag.gov.

How to Attend the Hearing

The formal rulemaking hearing is Monday, October 26, 2026, at 10:00 a.m.

• In person: Colorado Department of Law, 1300 Broadway, Room 1D, Denver, CO 80203. Registration isn't required but is encouraged.
• Virtually: Register for the Zoom webinar to receive the link.

The draft rules, including the October 6 interim redline, are posted on the AG's AI rulemaking page.

What to Do Now

Don't wait for final rules. Pull every open requisition that hires in Colorado and list its knockout questions. For each one, answer three questions:

1. Does a wrong answer reject the applicant automatically?
2. Does a person review the rejected applications?
3. Can you tie the question to a bona fide job requirement?

The third question isn't new. Knockouts have always carried discrimination risk, and Colorado already restricts some of them. The Chance to Compete Act limits criminal history questions on initial applications, and the Job Application Fairness Act bars asking for age, birth dates, and graduation dates.

Remove the knockouts you can't defend. For the ones you keep, decide now: either a person reviews every rejected application, or you build the notice and adverse-outcome process the law requires before January 1.

Next in this series: what else the ADMT Act changes for Colorado employers beyond hiring, and a step-by-step plan for small and mid-sized employers to get ready.

This post is general information, not legal advice. Have employment counsel review your notices and processes before January 1.