May 2024 | Client Alert
On April 29, 2024, the White House released a statement detailing key Artificial Intelligence (AI) actions following President Joe Biden’s Executive Order on the “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (E.O.).” The E.O., which was issued on October 30, 2023, required that, within 180 days following its publication, the Secretary of Labor must develop and publish principles and best practices for employers that could be used to mitigate AI’s potential harms to employee’s well-being and maximize its potential benefits.
Following the statement’s release, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) and the Office of Federal Contract Compliance Programs (OFCCP) developed independent guidance on the use of AI in the workplace.
I. Key Aspects of the WHD’s Guide
Hours Worked
Employers should exercise responsible human oversight when using AI systems to ensure proper accounting and compensation of employee work hours because the implementation of AI may undercount hours worked, particularly during possible break times or when employees perform work in multiple locations. Thus, employers must ensure they are paying employees regular rates and overtime premium for all hours worked in compliance with FLSA standards.
Wages
Employers must comply with minimum wage and overtime pay requirements under the FLSA and other applicable laws, regardless of the use of AI or other technologies. This necessitates proper human oversight to ensure that such systems accurately guarantee payment of minimum wage, regular rates, and overtime premiums.
Prohibited Retaliation
Employers who integrate AI or automated systems into the workplace must exercise caution to ensure that such technology is not used to retaliate against employees in contravention of federal labor standards. Regardless of the integration of AI technology, employers bear the responsibility of complying with anti-retaliation provisions enforced by the WHD.
Family and Medical Leave Act (FMLA)
Employers often leverage AI and other technological solutions to process leave requests or track time off. However, the reliance on automated systems for these tasks can present compliance challenges if not accompanied by responsible human oversight. For this reason, employers must comply with the FMLA regardless of whether they use AI or other automated systems to track and manage the administration of federally protected leave.
Nursing Employee Protections (and the PUMP Act)
Under the FLSA, as amended by the PUMP Act, employers must provide nursing employees with reasonable break time to pump breast milk during work hours. Denying these breaks to covered employees is prohibited. In addition, employers are accountable for ensuring compliance by facilitating breaks for nursing employees and preventing AI or other automated systems from penalizing employees for exercising their right to pump breast milk at work.
Employee Polygraph Protection Act of 1988 (EPPA)
EPPA prohibits private employers from administering lie detector tests on employees or pre-employment screenings. Employers utilizing any form of lie detector test, including those employing AI technology, are bound by the EPPA’s restrictions unless specific exemptions outlined in the law apply. The use of AI or similar technologies by employers to assess an individual’s truthfulness may fall under the purview of EPPA’s regulations governing lie detector tests.
II. Key Aspects of the OFCCP’s Guide
EEO Obligations Extended to Federal Contractor’s Use of AI
Covered federal contractors are required to refrain from discriminatory practices in employment and to actively promote equal opportunities for both employees and job applicants, irrespective of their race, color, religion, sex, sexual orientation, gender identity, national origin, disability status, or protected veteran status. These EEO obligations extend to the use of AI systems by federal contractors in making employment-related decisions.
Federal Contractors’ Obligations
- Maintain confidentiality of records consistent with all OFCCP regulatory requirements.
- Cooperate with OFCCP providing the necessary, requested information on AI systems.
- Make reasonable accommodations for recognized disability of a qualified applicant or employee with a disability unless the accommodations burden the business operations.
- Validate the system in accordance with applicable OFCCP non-discrimination laws and Uniform Guidelines on Employee Selection Procedures (UGESP) when a selection procedure, including one with AI, results in an adverse impact on a protected group.
- Be responsible for its use of third-party products and services for which can include AI.
Implementation of Proper Systems to prevent Discrimination
OFCCP established that federal contractors must design and implement proper automated systems to prevent inequalities that are present in the workplace that can potentially violate employees’ civil rights, due to AI having the potential to embed bias and discrimination into a range of employment decision-making processes.
Best Practices for Federal Contractors
Federal contractors should follow OFCCP’s best practices pertaining to providing advance notice and appropriate disclosure of use to applicants and employees, the use of an AI system, obtaining vendor-created AI systems, and focusing on accessibility and disability inclusion.
III. Recommendations
AI has the potential to help improve compliance with the law, but without proper human oversight it can pose potential risks to workers with respect to labor standards. For this reason, employers must examine ways to minimize potential legal risks, ensuring the responsible use of AI to comply with WHD laws. Similarly, federal contractors must be aware of their compliance obligations related to AI systems and of the potential to infringe an employee’s civil rights when AI systems are improperly designed or implemented, leading to discrimination in the workplace.
IV. Future Next Steps
Part of the Equal Employment Opportunity Commission’s (EEOC) Strategic Enforcement Plan for 2024-2028 (Strategic Plan) will focus on addressing discriminatory recruitment and hiring practices that address instances where employers use AI and machine learning in recruitment processes, potentially resulting in biased decisions that discriminate against protected groups based on factors like race, sex, color or other EEOC enforced statutes. Although, the EEOC has not issued any AI guide in almost a year and has not released any report within the 180 days of the E.O.
DOL’s WHD and OFCCP guidance represent efforts to regulate the use of AI in the absence of new legislation from Congress. As a result, it is anticipated that additional guidance on AI will be forthcoming in the future.
Given its dynamic evolution, employers must be vigilant regarding the evolving legal landscape concerning AI and automated systems in the workplace. Both employers and federal contractors should consult their legal counsel to ensure that their AI-driven systems comply with federal and state statutes and regulations. Finally, it is imperative for employers and federal contractors to explore strategies to mitigate potential legal and business liabilities stemming from AI by instituting utilization protocols and establishing internal operational procedures.
Because of the general nature of this newsletter, nothing herein should be considered as legal advice or a legal opinion. For further information about the contents of this newsletter, or should you need further assistance in connection with this matter, please contact the firm’s Labor and Employment Department.
For any questions or inquiries regarding this topic do not hesitate to contact us at info@oneillborges.com or your prime contact attorney at O’Neill & Borges LLC.
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This O’Neill & Borges Client Alert is prepared for general information purposes only. It does not constitute legal advice or a legal opinion; nor does it establish an attorney-client relation with the recipient. For further information or to establish an attorney-client relation please contact us at info@oneillborges.com or your prime contact attorney at O&B.