A closer look: Balancing AI and FLSA compliance
There’s no denying the help artificial intelligence (AI) can provide, particularly at a time when streamlining tasks might help lower workplace stress. But can AI use unknowingly put employers at risk of violating laws such as the federal Fair Labor Standards Act (FLSA)?
If not used correctly, yes, and U.S. Department of Labor (DOL) agents might be on the lookout for it.
Human touch still needed
According to the DOL, without responsible human oversight, employers that use AI incorrectly can unintentionally risk violating the FLSA when it comes to properly tracking nonexempt (“hourly”) employees’ work time, and paying them correctly.
6 ways employers should lookout for AI risks:
- Hours worked: AI used to categorize time as non-compensable work hours based on its analysis of worker activity, productivity, or performance, can result in not paying employees for all hours worked.
- Metrics: AI that tracks keystrokes, eye movements, internet browsing, or other activity to measure productivity are not the only factors used when figuring out whether an employee is performing hours worked under the FLSA. Such metrics do not substitute for the analysis of whether the employee was suffered or allowed to work.
- Meal periods: Timekeeping systems that incorporate AI to predict and auto-populate time entries based on earlier time entries, regularly scheduled shift and break times, business rules, and other data pose risks can automatically deduct meal periods and other longer breaks from an employee’s working hours, even if the employee is not completely relieved from duty.
- Waiting time: AI used for scheduling and assigning tasks risks issues regarding potential hours worked when employees are waiting for their next task to be assigned or their schedule of assignments to be updated. When employees are not completely relieved from their duties, or are expected to remain nearby their workstation, they’re generally considered to be “engaged to wait,” and must be paid. AI might not accurately account for increments of time when the employee was waiting for their next assigned task.
- Commuting time: AI that tracks employees’ locations and considers employees to be working only when they’re at a location not their drive time, can overlook situations in which employees begin working before they arrive at the designated worksite. If the employer asks them to pick up materials at the company headquarters or purchase supplies at the store on their way to the worksite, that time needs to be counted and employees need to be paid. Otherwise, this could put employers at risk of not paying employees for all hours worked.
- Overtime: Employers that miscalculate the number of hours employees work also risk miscalculating how much overtime employees have worked. AI used to calculate employee overtime hours and pay must be accurate.
Despite the risks, employers may use AI to help with HR functions to help create efficiencies. They should, however, ensure the AI isn’t creating more trouble than it’s worth by causing them to violate employment laws, which can get costly. From April 23 through May 1, the U.S. DOL recovered over $2.6 million dollars in FLSA violations. As technology continues to develop, the number of violations and fines will likely increase.
Key to remember: Employers using AI to help streamline processes to track and record nonexempt employees’ work hours and pay must ensure the results are accurate or face a potentially expensive consequence.