Colorado Legislators Seek to Prohibit the Use of Surveillance Data to Set Prices and Wages with Proposed Bill

Brett Whitley, Associate

            On May 6, 2026, the Colorado Senate passed House Bill 26-1210 titled, Concerning Limiting the Use of Intimate Personal Data to Make Inferences That Impact a Person’s Financial Position (the “Bill”),[1]thereby sending the Bill to Governor Polis for his consideration.  The Bill would limit businesses’ ability to use sophisticated algorithmic tools capable of tailoring prices and compensation offers to individual users or employees based on their behavior data, such as their browsing history, purchase patterns, location data, and even biometric information.  Proponents of the Bill claim that making the Bill law is a necessary step to prevent businesses from using automated systems informed with individuals’ personal data to charge individuals more or pay them less.

The Alleged Use of Surveillance Data to Set Wages and Prices

            Consumers and workers allege businesses are using artificial intelligence systems or other data processing techniques to implement a price or wage setting algorithm (“PWSA”) to set a wage for the worker or a price of a product or service for a consumer.  More specifically, consumers and workers allege that businesses are using PWSA’s to gather data about them found online and use that data to pay workers lower wages or charge consumers higher prices.  For instance, a gig worker for Uber alleges that Uber began sending him ride requests that paid less after he overdrafted his bank account and accepted a loan, indicating that Uber believes that he would be more likely to accept lower fares due to his need for income.  And as it pertains to consumers, the legislators drafting the Bill found that medical businesses use PWSA’s to discern that consumers who regularly purchase insulin-related supplies have a medical necessity to purchase those supplies and thus, would set higher prices for those consumers.

What the Bill Prohibits

            The Bill prohibits a person from engaging in “individualized wage setting” or “individualized price setting.”  The Bill defines “individualized wage setting” as using a PWSA or the output of a PWSA in determining a wage offered to a worker.  Under the Bill, a person has not engaged in individualized wage setting if they can demonstrate two things simultaneously: first, that the individualized wages are based solely on data specific to the individual worker that is directly related to worker seniority or the tasks the worker was hired to perform, including data associated with a worker's performance or generation of new business; and second, that the employer "discloses in plain language before hiring a worker to perform work, and to all workers whose wages are set in whole or in part through a [PWSA], what data is considered and how the [PWSA] considers the data."

            Further, under the Bill, a person using a PWSA to set wages must: develop and publish reasonable procedures to ensure the accuracy of the data considered by the PWSA; provide workers with access to information about what data is collected when the PWSA sets their particular wages; and maintain a mechanism to allow a worker to correct or challenge the accuracy of data considered by the PWSA.

            The Bill defines “individualized price setting” as using a PWSA or the output of a PWSA in determining a price offered to a consumer, but pertinently does not include setting prices based on supply and demand, delivery distance, or delivery time.   Also, the Bill would not prohibit discounted prices to those in loyalty programs or those who are members of a broadly defined and publicly recognized group of consumers like teachers, active military personnel or senior citizens.

            If a person violates the Bill, the same would constitute a deceptive trade practice under Colorado’s Consumer Protection Act and Colorado’s Attorney General can bring a civil action on behalf of the state against that person, with a possible maximum civil penalty of $10,000 per violation.  Also, aggrieved parties, such as consumers or workers, can bring a civil action on their own behalf or a group of similarly situated persons to recover damages, costs, and reasonable attorney fees. 

Employer Considerations

            If the Bill becomes law, employers should audit their use of PWSA’s to set prices and/or wages to ensure that said use does not constitute “individualized wage setting” or “individualized price setting.”  Further, if the Bill becomes law, employers using PWSA’s to set wages should implement adequate procedures to notify workers of the use of the PWSA, ensure the accuracy of the data considered by the PWSA, and allow workers to challenge the accuracy of the data considered by the PWSA.  Campbell Litigation will continue to monitor the Bill and other potential changes to Colorado wage and price setting law.

[1] H.B. 26-1210, 75th Gen. Assembly; see https://leg.colorado.gov/bill_files/115897/download.