Four developments since April have shifted expectations for people who use AI in hiring. Colorado's Governor signed a replacement for the state's AI law, covering automated decision tools, on 14 May 2026. The Australian Public Service set principles for AI in recruitment that its agencies were expected to have in place by 1 June. Indeed launched an AI sourcing assistant for recruiters on 15 June. And on 27 July the European Union's delay to its high-risk AI rules, which cover hiring tools, took effect.
None of these is a new Australian law for private employers. Together they point the same way: tell candidates when AI is involved, keep a person responsible for the decision, and be able to explain how the outcome was reached. This article is general information for employers and recruiters, not legal advice.
What happened
Colorado rewrote its AI law around automated decisions. The Colorado General Assembly's record for Senate Bill 26-189, Automated Decision-Making Technology shows the Governor signed it on 14 May 2026. The official summary says it repeals and re-enacts the consumer protections in the state's 2024 AI law with new requirements for automated decision-making technology used in "consequential decisions", a category that includes employment. The signed Act takes effect on 1 January 2027.
The Australian Public Service set its own rules. The Australian Public Service Commission's page on AI in recruitment, published on 20 April 2026, says agencies are expected to implement its Principles for agency use of AI in Recruitment by 1 June 2026. The principles say AI tools must not make the final decision in a recruitment outcome, require any agency using AI in recruitment to have a policy for it, and require agencies to tell candidates in the job advertisement and candidate pack if AI will be used, including how, when and which tools.
A major job site added an AI sourcing tool. On 15 June 2026 Indeed announced Sourcing Assistant, an AI feature that searches candidate profiles and invites people to apply for open roles. It is available to United States employers on two Smart Sourcing subscription plans, and Indeed plans to expand to more markets. A month later, on 14 July, Indeed published a statement on how it keeps people in charge of hiring decisions, which says its AI-generated summaries and scores are labelled and that AI summaries should not be used as the sole or most important factor in an employment decision.
The EU's hiring rules moved to late 2027. A European Commission news item published on 27 July 2026, AI Omnibus enters into force, says the AI Omnibus amendments to the AI Act entered into force that day and that the rules for high-risk AI systems listed in Annex III apply from 2 December 2027. Annex III of the AI Act covers employment, including AI systems used to filter job applications and evaluate candidates. The obligations were postponed, not removed.
Key details
| Development | Date | Who it applies to | What it asks for |
|---|---|---|---|
| Colorado SB 26-189 | Signed 14 May 2026; takes effect 1 January 2027 | Developers and deployers of covered technology doing business in Colorado, as the Act defines them | Notice when the tool is used, a plain-language explanation within 30 days of an adverse decision, access to and correction of personal data, human review on request, records kept for at least three years |
| APS principles for AI in recruitment | Published 20 April 2026; expected in place by 1 June 2026 | Australian Public Service agencies and recruitment providers working for them | A policy on AI in recruitment, disclosure to candidates, human oversight, no final decisions by AI, an impact assessment before new tools are used |
| Indeed Sourcing Assistant | Announced 15 June 2026 | United States employers on Smart Sourcing Professional or Enterprise plans | Recruiters set the criteria, control outreach volume and approve messages |
| EU Digital Omnibus on AI | In force 27 July 2026 | High-risk AI systems listed in Annex III of the AI Act, which include recruitment and selection tools | Rules for Annex III high-risk systems apply from 2 December 2027 |
Colorado's Attorney General enforces the Act through the Colorado Consumer Protection Act, and the official bill summary says it creates no new private right of action.
Why it matters
Three ideas keep appearing.
- Disclosure. Colorado requires notice at the point where a person meets the tool. The APS principles require it in the advertisement and candidate pack. Indeed says its AI-generated content is labelled.
- A human decision. Under the APS principles AI assists human judgement and does not replace it, and where AI helps shortlist, the selection panel should check the result, for example by reviewing a random sample of applications. Colorado lets people ask for a person to review an adverse outcome.
- Explanations and records. Colorado requires a plain-language description after an adverse outcome and records kept for at least three years. The APS principles say recruitment decisions must be explainable and defensible.
A small employer may meet AI in hiring without buying anything new, when a job board, applicant tracking system or assessment tool it already uses starts ranking, summarising or scoring candidates. The Indeed release cites a Harris Poll survey, conducted for Indeed, of 300 United States hiring managers at companies with 500 or more employees, in which 71 per cent said higher application volume makes qualified candidates harder to find.
For Australian businesses the direct effects are narrow. The APS principles require agencies to ensure that recruitment providers working for them use AI in line with the principles. And the APS documents are a plain-English model that other employers can read.
What this means for businesses
A small or medium business needs to know which tools are involved and who is responsible for each decision:
- List where software touches candidates. Job boards, applicant tracking, online assessments and video interview tools. Mark each one that ranks, scores or filters.
- Ask each vendor. What does the feature do, can it be turned off, can a person still see every application, and what documents its limits?
- Tell candidates. Add a line to job advertisements saying which steps use AI and that a person makes the decision.
- Name the decision-maker. One person signs off each shortlist and reads a sample of the applications the tool ranked low.
- Keep the record. Save the criteria, the shortlist and the reasons.
- Set a rule for candidates' own AI use. The APS approach is to allow it, expect honesty and reserve the right to ask how it was used.
Checking claims matters more as applications become easier to polish. Platforms such as Talent Tabloid, a recruitment and candidate verification platform, are built around having employment, education and references checked by a person instead of taken on trust. Recruitment agencies such as Talynx, which connects global talent with employers across Australia and New Zealand, choose sourcing tools and also answer client questions about how a shortlist was produced.
Much of this is systems work: knowing what data each hiring tool holds and who can see it. We help recruitment and migration businesses with that, through business systems and integrations and IT consulting when you are choosing a platform. For a second opinion on your hiring systems, send us an enquiry.
Key takeaways
- Colorado's replacement AI law was signed on 14 May 2026 and takes effect on 1 January 2027, with notice, explanation, correction and human review requirements.
- Australian Public Service agencies were expected to apply new AI recruitment principles by 1 June 2026, and agencies are to ensure their recruitment providers align.
- Indeed announced Sourcing Assistant on 15 June 2026: AI inside a tool employers already use.
- The EU's rules for Annex III high-risk AI systems, which include recruitment tools, now apply from 2 December 2027.
- The common thread is disclosure, a human decision and a record of how it was made.
Frequently asked questions
Do any of these developments ban AI screening of job applicants in Australia?
No. None of the four developments bans it, and none is an Australian law aimed at private employers' hiring tools. This article does not cover other laws that may apply to hiring. It is general information, so ask a lawyer how your obligations apply to a particular tool.
Do the Australian Public Service principles apply to private businesses?
They are written for APS agencies. They reach private firms in one way: the principles say agencies are to ensure that recruitment providers undertaking services for them use AI in line with the principles. Other employers can read them as a model.
Does the Colorado law affect an Australian business?
The official summary does not discuss overseas businesses. The signed Act defines a deployer as a person doing business in Colorado that deploys covered technology, and the summary notes that specified entities are exempt. Whether the Act covers a particular business is a question for a lawyer. It takes effect on 1 January 2027.
What should a job advertisement say about AI?
The APS principles ask agencies to say whether AI will be used, how and when, and which tools. A short statement along those lines, plus a note that a person makes the final decision, is a model other employers can adapt.