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DOL Issues Bulletin on Artificial Intelligence in the Workplace

The use of AI technology or other automated systems does not relieve employers of compliance obligations under the Fair Labor Standards Act, the Family Medical Leave Act, the Employee Polygraph Protection Act, and other federal laws.

The U.S. Department of Labor’s Wage and Hour Division (DOL) has published a Field Assistance Bulletin addressing the application of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Employee Polygraph Protection Act (EPPA) to the use of artificial intelligence and other automated systems in the workplace. Employers should keep in mind that Field Assistance Bulletins published by the DOL are not binding regulations that impose new compliance obligations. Instead, they provide DOL staff and investigators with guidance on enforcement positions and clarification of DOL policies.

Artificial Intelligence and the FLSA

The DOL outlines that the use of AI and other automated technologies for employee scheduling, timekeeping, and tracking employee locations does not relieve employers from their responsibility to ensure that employees are properly paid for all hours worked under the FLSA. The DOL cautions employers to maintain proper human oversight when using these types of technologies to ensure proper compliance.

In the context of tracking work time, the DOL reminds employers that reliance solely on automated timekeeping and monitoring systems may create potential compliance challenges with respect to determining hours worked for purposes of federal wage and hour laws. An AI program that incorrectly categorizes time as non-compensable work hours based on its analysis of worker activity, productivity, or performance could result in a failure to pay wages for all hours actually worked.

Additionally, employers must ensure that employees are completely relieved of duty in order for time to be counted as unpaid break time. Automated systems that automatically deduct meal breaks and other longer break periods from an employee’s compensable work hours, even if the employee is not completely relieved from duty, may result in an FLSA violation.

The DOL has expressed concern about the potential for auto-populating timekeeping tools and location-based AI monitoring technologies to cause wage theft or minimum wage violations.

Without appropriate human oversight, a system that automatically deducts the break from the employee’s work hours based on the employee’s past time entries could result in the employer failing to properly record and pay the employee’s hours worked. Employers must also ensure that any automated system is accurately accounting for increments of time when an employee is waiting for their next assigned task, if applicable, as well as the time the employee takes to complete each task. This comes up mostly in the context of programs designed to auto-populate employee scheduling and task assignments.

Another area identified by the DOL concerned using AI location-based technology to monitor where an employee is “working.” According to the DOL, using such technology may inadvertently lead to wage and hour liability, and WHD provided the following example: “A system that records only the time the worker spent at the worksite as compensable work hours when the worker is performing work away from the worksite may fail to account for travel time between worksites or hours worked at other locations and may result in minimum wage or overtime pay violations.”

Lastly, when it comes to calculating wages and overtime compensation owed under the FLSA, the DOL found that some AI-driven systems have the ability to automatically recalculate and adjust a worker’s pay rate throughout the day, which may result in significantly different “regular rates” from one workweek to the next. Similarly, some automated task assignment systems have the ability to determine the number of tasks assigned to individual workers, based on a variety of factors and metrics, and then pay workers at different rates based on tasks performed. The DOL instructs that employers who use such technologies “must ensure that the different rates are properly calculated into the regular rate of pay.”

Artificial Intelligence and the FMLA

The DOL indicates that employers must comply with the FMLA regardless of whether they use AI or other automated systems to track and manage the administration of protected FMLA leave. The use of AI or automated technologies should be overseen by the employer to avoid the risk of widespread violations of FMLA rights when processing leave requests, including determining eligibility, calculating available leave entitlements, or evaluating whether leave is for a qualifying reason, as it can create potential compliance challenges. Employers are ultimately responsible for ensuring that these systems comply with the law.

AI systems used to track leave use may not be used to target FMLA leave users for retaliation or discourage the use of such leave. Employers are prohibited from using AI systems to count FMLA leave use as a negative factor in employment actions such as hiring, promotions, or disciplinary actions or assign negative attendance points to FMLA-protected absences. An employer would also violate the FMLA if an automated system fails to provide benefits to an employee on FMLA leave if the employer provides those benefits to employees who use other similar types of leave.

Artificial Intelligence and the EPPA

The Employee Polygraph Protection Act of 1988 (EPPA) generally prohibits private employers from using lie detector tests on employees or for pre-employment screening of individuals. The DOL notes that some AI technologies have the ability to use eye measurements, voice analysis, micro-expressions, or other body movements to suggest if someone is lying or detect deception.

However, an employer’s use of any lie detector test, including any such device that utilizes or incorporates AI technology used to detect deception, may be prohibited by the EPPA unless used in accordance with the limited exemptions provided for in the law.

In general, the guidance does not create or impose new obligations for employers but emphasizes the importance of proper human oversight when using AI or other automated systems that may impact employee rights under the FLSA, FMLA, or EPPA. Employers remain responsible for any actions or inactions resulting from the use of AI technology, and therefore, should take care to ensure the responsible use of AI in order to continue to comply with the laws DOL enforces.

Action Items for Employers

  1. Review any AI technologies or other automated systems used to track employee work time, calculate employee wages, track or administer employee leave, or detect employee deception to ensure compliance under applicable federal laws.
  2. Consult with legal counsel regarding implementation and application of any new automated technology that impacts employee compensation, leave, or workplace policies.

Are you wondering how organizations like yours should adapt to AI? Check out this thinkpiece on Why Business and HR Leaders Should Guide AI Policy.