Wage Against the Machine: Artificial Intelligence and the Fair Labor Standards Act


Artificial intelligence (AI) is being used in the workplace for a wide range of wage and hour purposes, including AI-driven payroll, scheduling and staffing, timekeeping, and monitoring employees. If appropriately designed and applied, AI may dramatically improve productivity, lower certain costs for businesses, give workers and employers greater flexibility, and advance accessibility in the work- place. At the same time, AI poses unique compliance challenges under wage and hour laws. Specifically, the Fair Labor Standards Act (FLSA) requires employers to strictly adhere to the federal minimum wage and overtime requirements when compensating covered employees for all hours worked. However, the rapid growth of AI has fundamentally disrupted the traditional understanding of what constitutes compensable hours worked. The use of AI in the workplace is also increasingly relevant to the coverage and classification of both workers and employers under wage and hour laws, especially with respect to independent contractors, joint employer status, and several FLSA exemptions.

This Article examines the interaction between AI and wage and hour law. The Article begins by exploring the widespread uses of AI and its impact on wage and hour compliance. After examining the specific wage and hour provisions implicated by AI, the Article then shifts to applying wage and hour law to AI-related risks. The Article concludes by arguing that federal agencies need to issue more guidance and should encourage voluntary compliance programs to proactively ad- dress such risks. Finally, the Article discusses best practices to guide employers in using AI to ensure wage and hour compliance.


Stanford University Stanford, California
  • Bradford J. Kelley, Wage Against the Machine: Artificial Intelligence and the Fair Labor Standards Act, 34 Stan. L. & Pol'y Rev. 261 (2023).
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