FLSA Overtime Exemptions & AI-Integration

The use of artificial intelligence in white-collar jobs raises concerns about how employees are classified under the Fair Labor Standards Act.

FLSA Overtime Exemptions

• Classification: Employees are classified as either exempt or non-exempt.

  • Non-exempt: Entitled to minimum wage and overtime pay for hours over 40 per week.

  • Exempt: Must meet salary thresholds and specific job duty tests, including:

    • Administrative Exemption: Requires independent judgment over significant matters.

    • Executive Exemption: Involves authority over personnel decisions.

    • Learned Professional Exemption: Demands advanced knowledge and discretion.

Impact of AI on Job Duties

AI can diminish the independent judgment and discretion necessary for exemption status, potentially leading to misclassification claims.

For Instance:

• Supervisors: AI may automate workload allocation, reducing managerial discretion.

• Scientists: AI diagnostic tools may shift roles from primary analysis to oversight, questioning exemption eligibility.

The result may be that the exemption is lost because the work factors that qualified the job as exempt have been eliminated through the AI implementation.

Actions to Take:

• FLSA Classification Audits: Assess whether AI integration alters the nature of job roles and the degree of judgment exercised.

• Clearly define responsibilities that require independent judgment in revised job descriptions.

• Track changes in job functions as AI capabilities grow.