The growing use of artificial intelligence risks making white-collar employees like accountants and human resources professionals potentially eligible for overtime pay.
AI’s rapid adoption to automate routine job tasks almost doubled over the past two years, with the highest users in sectors like technology, professional services, and finance, a recent Gallup survey found.
But use of the technology for functions that traditionally require human discretion or independent judgment could knock those workers outside the Fair Labor Standards Act’s exclusions from overtime pay, wage-and-hour attorneys said. The 1938 law has one carveout for executive, administrative, and professional workers that’s based, in part, on their duties.
The FLSA is “decades old and didn’t anticipate anything like AI,” said Zack Domb, a partner at the worker-side Domb & Rauchwerger Employment Law Group.
“The foundation starts to crack” when AI tools absorb at least some of what was previously required by humans, said Domb, who represented employers in the past.
For example, AI has already started to take over streamlining and data analysis duties for accountants, flagging a range of issues in real time like duplicate transactions, spending patterns, and financial fraud, attorneys said.
“From the plaintiff’s bar perspective, AI is quietly replacing the judgment that once justified exempt status,” Domb said. “We do expect more misclassification lawsuits to stem from that.”
Management-side attorneys...
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