The Emergence of AI in the Workplace and How AI Can Potentially Contribute to FLSA Violations

These days, ads for artificial intelligence-related programs and applications seem to be everywhere. AI has the potential to do many beneficial things like making workplaces more efficient and safer. It also has the possibility of negative impacts, including in the area of employment law. The U.S. Department of Labor’s Wage and Hour Division (WHD) recently released a publication warning of ways that AI can lead employers into violations of the Fair Labor Standards Act. Whether or not they are tied to AI, an experienced Atlanta wage and hour lawyer can provide very human answers to all your questions about FLSA compliance.

The WHD’s recent publication, Field Assistance Bulletin No. 2024-1, looked at ways AI could lead an employer into non-compliance. The first area the division discussed was AI productivity monitors.

Modern AI technology can monitor workers “in real time,” using metrics like website browsing, the number of computer keystrokes or mouse clicks, or eye movements (via webcam,) to ascertain an employee’s activity and productivity levels. While employers may use this technology and these metrics to assess employees’ diligence and productivity, those determinations do not necessarily govern how the law calculates workers’ hours worked.

As the publication reminded readers, a worker’s workweek “ordinarily includes all time during which an employee is necessarily required to be on the employer’s premises, on duty, or at a prescribed workplace.” A “workday” generally is “the period between the time… when an employee commences their first ‘principal activity’ and the time on that day at which they cease their last principal activity or activities.”

In other words, an employer potentially may use AI metrics of worker inactivity to make internal decisions like promotion/demotion, issuance/non-issuance of bonuses, or workplace discipline, but an employer who declines to pay a worker for part of the time spent at their workstation solely because the AI says the worker was inactive or “loafing” may be in violation of the FLSA.

‘Smart Entries’ and Timekeeping Records

The publication also reminded employers that they bear the ultimate obligation to ensure timekeeping records accurately reflect the hours their employees worked, even if they have handed off that task to an outside provider or AI technology. The division noted that some current AI technologies “make predictions and… auto-populate time entries based on a combination of prior time entries, regularly scheduled shift times and break times, business rules, and other data.” Using these “smart entries” is not forbidden, but an employer may run afoul of the FLSA if it uses this technology and the end result is a worker (or workers) not being paid for all the time they worked.

Another area where AI may lead to problems is waiting time. In general, if an employee was “engaged to wait,” that waiting period constitutes compensable time under the FLSA. If you’re at a work site but inactive because you’re waiting for your next assignment, that is still time for which the FLSA says you should be paid.

Many modern AI-driven logistics applications may create or alter work schedules in real time based on employer needs. As the bulletin pointed out, an employee who, while waiting for the issuance or update of their schedule, “is expected to remain nearby their workstation and is not given a set time when to report back to work” is “generally considered to be ‘engaged to wait.’” To ensure FLSA compliance, employers must count those periods as compensable time and pay those workers accordingly.

Geotrackers and Offsite Work

Furthermore, some employers use AI-based geotracking software to monitor their workers’ locations throughout the workday. The division warned employers to ensure that these AI-based applications did not erroneously count workers as “not working” and fail to pay workers for time spent working at a location outside their normal job sites.

Employers’ use of AI in managing workers is on the upswing, and will likely continue in that direction. Even as employers move certain tasks related to the payment of workers from human employees to AI, employers are ultimately responsible for ensuring that workers receive their proper wages and are paid for all the hours they work. Whether you’re a worker harmed by a potential AI-related FLSA violation or an employer with questions about FLSA compliance and AI, the Atlanta wage and hour attorneys at the law firm of Parks, Chesin & Walbert can help you with the knowledgeable advice and information you need. Contact us today at 404-873-8048 or through this website to schedule a consultation to learn more.

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