Excited about the potential of AI? Don’t forget legal compliance

Artificial intelligence (AI) isn’t just creating buzz. It’s also sparking both fear and enthusiasm, with some employers worried about the downsides and others eager to dive in and capitalize on the potential. No matter how it’s viewed, though, employers must focus on how this brave new world intersects with legal compliance.

Guidance from the DOL

With AI being incorporated in the automated systems employers use, the U.S. Department of Labor (DOL) saw the need to issue guidance to its staff across the country on how the new technology affects compliance with federal laws on wages and other employment matters.

In a memo issued to staff in April, Jessica Looman, administrator of the DOL’s Wage and Hour Division, noted that AI can enhance efficiency and accountability, but “without responsible human oversight, the use of such technologies may pose potential compliance challenges with respect to federal labor standards.”

One of the laws implicated is the Fair Labor Standards Act (FLSA), which requires that covered employees be paid at least the federal minimum wage for all hours worked and at least time and a half for each hour worked in excess of 40 in a single workweek.

The memo says that some AI and employee monitoring tools detect worker activity and determine when an employee is active or idle. Reliance on such systems without proper human oversight may categorize time as noncompensable even when it should be.