At Foley & Foley, PC, we’re seeing a surge in employment law issues stemming from AI implementation. The best way to harness this: Human supervision and a strong AI policy and process.
We have reviewed the commonly discussed risks but here are more AI perils every employer must understand and avoid:
Wage and Hour Compliance Issues
AI monitoring tools that track employee productivity, keystrokes, or work patterns can create unexpected wage and hour liabilities. These systems may capture off-the-clock work or fail to account for compensable time under the Fair Labor Standards Act (FLSA).
The Risk: Unpaid overtime claims, minimum wage violations, and class action lawsuits can result from inadequate time tracking and compensation practices.
Best Practice: Ensure AI monitoring systems properly capture all compensable time and comply with state-specific wage and hour requirements. That is, a human must always supervise this function.
Wrongful Termination and Due Process Failures
Over-reliance on AI recommendations for disciplinary actions or terminations can lead to wrongful termination claims, particularly when AI systems make errors or employees aren’t given proper opportunity to respond to AI-generated performance assessments.
The Risk: Wrongful termination lawsuits, breach of employment contract claims, and damage to company reputation.
Best Practice: Maintain human decision-making authority, provide employees with opportunities to challenge AI assessments, and follow established progressive discipline procedures.
ADA Accommodation Challenges
AI systems may fail to accommodate employees with disabilities or may discriminate against workers who require accommodations. For example, AI productivity monitoring might penalize employees who work differently due to disabilities, or voice-activated AI systems might not accommodate speech impediments.
The Risk: ADA violation claims and failure to provide reasonable accommodations can result in EEOC complaints and litigation.
Best Practice: Evaluate AI systems for accessibility issues and maintain flexible accommodation processes that account for AI limitations.
Union Relations and Collective Bargaining Complications
Implementing AI systems that affect working conditions, job responsibilities, or employment security may trigger collective bargaining obligations with unionized workforces. Unilateral implementation without proper consultation can result in unfair labor practice charges.
The Risk: NLRB complaints, work stoppages, and violations of collective bargaining agreements.
Best Practice: You may need to consult with union representatives before implementing AI systems and consider bargaining obligations under existing contracts.
Practical Steps for Compliance
To minimize these risks, employers should:
- Develop comprehensive AI governance policies with legal review
- Conduct regular bias testing and algorithmic audits
- Maintain human oversight in all employment-related decisions
- Provide transparency about AI use to employees
- Implement robust data security measures
- Train managers on AI limitations and legal requirements
- Work with experienced employment counsel to navigate compliance issues
The Bottom Line
AI offers tremendous opportunities for workplace efficiency, but the legal landscape is complex and rapidly evolving. Proactive compliance efforts and experienced legal guidance are essential to harness AI’s benefits while protecting your organization from costly employment law violations. Get out in front of this sooner rather than later.
For questions about AI implementation and employment law compliance, contact Foley & Foley, PC. Our experienced employment attorneys provide practical guidance to help businesses navigate the complex intersection of technology and workplace law.