Whatever your opinion is on remote work, it is not going anywhere.
When it comes to remote work one of the main issues is monitoring and tracking employee time. Generally, under the Fair Labor Standards Act, employers have an obligation to pay employees for all work the employer knows or should know has been performed. But it is not always clear when an employer “should know.” As the Department of Labor has noted, this is especially so with respect to telework, when employees are working without any direct oversight.
This has important implications for employers who use Artificial Intelligence tools to monitor and track time worked by remote employees. AI tools are used to monitor when employees login and logout but also when employee’s are “active” or “inactive.”
While AI time tracking certainly makes remote work easier, using AI tools can pose certain risks from a wage-hour perspective.
Employers are responsible to make sure that the software works. So, if the AI tool(s) fails, then the employer may have exposure. According to the DOL, “[a]n 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 worked.”
Another risk is that an AI tool could deduct from an employee’s pay short breaks of 20 minutes or less. Short breaks lasting 20 minutes or less are generally deemed to be for the employer’s benefit and, therefore, compensable under 29 C.F.R. § 785.18. If AI-monitoring tools deduct from pay “short breaks” because the tool recognizes that the employee is idle, an employer may violate the FLSA.
Reliance on AI-powered monitoring software can have a lot of benefits for employers, such as providing data into work habits. It should not, however, be used as a be all end all for time tracking.
Employers should audit any time tracking software. Also, employers should require employees to report hours worked that they believe were not captured by an AI tool. This may help reduce the risk of AI caused off-the-clock FLSA claims.