Illinois, Texas, and Colorado are each set to implement laws governing the use of artificial intelligence (AI) in the workforce in 2026, all while the federal government has signaled its intent to eliminate state-level regulations on AI.

On Dec. 11, 2025, President Donald Trump signed an executive order, titled “Ensuring a National Policy Framework for Artificial Intelligence,” which directed the federal government to review state laws that are deemed “inconsistent” with its plans to implement a national policy framework for AI. 

Meanwhile, new AI laws in Illinois and Texas went into effect on Jan. 1. Illinois’ new law, H.B. 3773, amends the state’s human rights act to make clear that the statute is triggered when discrimination emanates from an employer’s use of AI to make decisions on hiring, firing, discipline, tenure, and training. Under H.B. 3773, companies must notify workers when AI is integrated into any of the aforementioned workplace decisions. Furthermore, companies are barred from using ZIP codes in the AI model when evaluating candidates. Because these new protections were implemented as part of Illinois’ existing human rights code, they come with a private right of action. 

Texas’ new law, meanwhile, sets out certain consumer protections and enforcement mechanisms, establishes a sandbox program for testing AI systems with reduced regulatory risk, and creates a state council to “support innovation and oversee compliance.” Known as the Texas Responsible Artificial Intelligence Governance Act, this law attempts to walk a fine line between protecting public safety, individual rights, and privacy, while at the same time encouraging the advancement of AI technology in the state. Texas drafted the law in a business-friendly fashion, holding that a showing of disparate impact is not sufficient to demonstrate discriminatory intent. The law does not provide a private right of action. 

The third, and perhaps most significant, AI state law set to go into effect in 2026 is a Colorado measure aimed at shielding consumers from AI-based discrimination. The law, known as S.B. 24-205, directs companies that develop or use a “high-risk artificial intelligence system” to take reasonable measures to avoid algorithmic discrimination, and requires disclosures regarding the use of an AI system. Colorado’s law requires businesses and government agencies to run impact assessments, notify workers if an AI tool will be used to make an employment decision, give applicants or employees a chance to appeal an AI decision, and make a publicly available statement about the types of AI systems in use and how such systems manage the risk of discrimination. S.B. 24-205 is set to go into effect in June 2026. Like the Texas measure, Colorado’s AI law does not create a private cause of action; instead, the state attorney general has the exclusive authority to enforce the law.  

While these state laws seem to be at odds with the federal government’s new directive, they nonetheless remain good law. As such, employers in Illinois, Texas, and Colorado are advised to maintain compliance with these state-level laws as they head into 2026. Barnes & Thornburg is here to assist employers navigate this rapidly changing area of law.