The world of Artificial Intelligence (AI) is upon us and charging fast, “invading” every aspect of human endeavor.  Well, the world of wage hour regulation is no different and now the USDOL has reacted with guidance on the manners in which employers may/may not use AI.  A few weeks ago (April 29, 2024) the Wage and Hour Division (WHD) issued a position paper with guidance on employer use of AI.

The Field Assistance Bulletin (“FAB”) No. 2024-1 is entitled “Artificial Intelligence and Automated Systems in the Workplace under the Fair Labor Standards Act and Other Federal Labor Standards.” It indicates to field staff, e.g., investigators, instructions “regarding the application of the Fair Labor Standards Act (FLSA) and other federal labor standards” regarding the escalating use of AI in the workplace.

The essence of the guidance is that although these new systems and procedures have benefits, “human oversight” is necessary to ensure that they work properly and ensure all employees are correctly compensated. The DOL’s Wage and Hour Division published new field assistance guiding its field staff on the implications of employers’ increasing use of automated systems and AI technologies.  The guidance cautions that while such technologies have workplace benefits, human oversight is necessary to avoid results that violate federal labor laws.

For example, the FAB states that AI systems used to record working time, breaks, lunch, etc., must capture all hours worked.  The FAB mandates that employees must be “paid in accordance with federal minimum wage, overtime, and other wage requirements, even when those wage rates vary substantially due to a host of inputs.” The FAB warns against the possibility that AI processes “may undercount hours worked.”  That would result in FLSA violations.

The FAB makes clear that the FLSA measure of hours worked does not hinge on how productive the worker may/may not be.  It states that AI systems that seek to track “keystrokes, eye movements, internet browsing, or other activity to measure productivity are not determinative of whether an employee is performing ‘hours worked’ under the FLSA.” In other words, it is “not a substitute for the analysis” for determining “hours worked.”  To the contrary, employers must exercise “reasonable diligence” to track and record working hours, including break times.  The FAB warns against processes that auto-populate time entries based on “predicting” what employees work but any such predictions must ensure accuracy in recording actual work hours.

The Takeaway

Although AI is here to stay and has the ability to help employers be more efficient and their companies more productive, the basic principle that employers are ultimately responsible for ensuring accurate recording and capturing of working hours remains inviolate. Employers will not be able to “hide behind” their AI processes or defend by asserting the “machine did it.”

Won’t be able to say the dog ate my homework…

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