AI in the Workplace – Protecting Employee Well-being

As artificial intelligence becomes embedded in daily business operations, it’s transforming how work gets done, but not without risk. From algorithm-driven decision-making to digital surveillance, AI tools can impact employee privacy, stress levels, and mental health. This fact sheet breaks down the potential risks of AI in the workplace and outlines actionable steps employers can take to safeguard worker well-being while still embracing the efficiency AI offers.

There is a blend of urgency, anxiety and excitement around the arrival of artificial intelligence (AI)-driven processes in the workplace. The Biden Administration, U.S. Department of Labor (DOL), and other government agencies responded with directives and guidance to help employers navigate AI deployment without harming the well-being of employees or violating their employment rights.

Executive Order

The Biden Administration issued an Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence on Oct. 30, 2023. Under the executive order:

• AI must be safe and secure, including the use of labeling and provenance mechanisms to identify AI-generated content.
• Robust, reliable, repeatable and standardized systems, policies and institutions must be used to track performance and mitigate risks.
• Investments in AI-related education, training, development, research and capacity are needed, as well as effective measures to protect intellectual property, inventors and creators.
• AI will not be deployed in the workplace in ways that undermine employees’ rights, worsen job quality, encourage undue worker surveillance, lessen market competition, introduce new health and safety risks, or cause harmful labor force disruptions.
• The use of AI to disadvantage vulnerable populations or deny equal opportunity and justice for all will not be tolerated.

DOL Principles

In response to the Executive Order, the DOL released Artificial Intelligence and Worker Well-being: Principles for Developers and Employers on May 16, 2024, to  address anticipated benefits and potentially harmful impacts of AI-driven technology  on employees. The DOL’s principles focus on the potential for AI to “spur innovation, advance opportunity, and transform the nature of many jobs and industries while also protecting workers from the risk that they might not share in these gains.”

AI is expected to generate new types of jobs, including professions involved in the development, deployment and human oversight of AI applications.

According to the DOL, AI may be used to positively augment work by:

• Replacing/automating repetitive tasks
• Assisting employees with routine decisions
• Redirecting skilled employees to other responsibilities
• Creating demand for employees to learn how to use AI in their daily work

AI-augmented processes also pose risks, such as the potential for declines in work quality and morale when employees respond to loss of autonomy or fear of job loss. “The risk of AI for workers is greater if it undermines workers’ rights, embeds bias  and discrimination in decision-making processes, or makes consequential workplace decisions without transparency, human oversight and review,” the DOL states.

The DOL principles are intended to provide an AI-use framework for all types of industries. AI developers and employers are advised to review and customize best practices based on their own operations and goals. Employee input is strongly encouraged. The principles include:

1. Ethical development: AI systems should be designed and implemented in ways that protect workers.
2. Oversight: Organizations should have clear governance systems, procedures, human oversight and evaluation processes for AI systems in the workplace.
3. Transparency: Employers should be transparent with workers and job seekers about the AI systems that are being used in the workplace.
4. Employee rights: AI systems should not violate or undermine workers’ rights to organize, their health and safety, or their wage-and-hour rights; they should include anti-discrimination and anti-retaliation protections.
5. Enhancement: AI systems should assist, complement and enable workers, and improve job quality.
6. Support: Employers should support and/or upskill workers during AI-related job transitions.
7. Data protection: Workers’ data collected, used or created by AI systems should be limited in scope and location and only used to support legitimate business aims; data should be protected.

Joint Statement

Prior to outlining these principles, the DOL joined with other federal agencies on  April 3, 2024, in the release of a Joint Statement on Enforcement of Civil Rights,

Fair Competition, Consumer Protection, and Equal Opportunity Laws in Automated Systems. The statement expresses a commitment to Americans to adhere to core principles of fairness, equality, and justice in the use of emerging technologies.

It states that “innovation and adherence to the law can complement each other and  bring tangible benefits to people in a fair and competitive manner, such as increased access to opportunities as well as better products and services at lower costs.” However, it also notes that these systems have the “potential to perpetuate unlawful bias, automate unlawful discrimination and produce other harmful outcomes.” Concerns highlighted in the joint statement include:

• Use of data and datasets that are unrepresentative or imbalanced, incorporate historical bias or contain other types of errors that can contribute to discrimination.
• Automated systems that correlate with data associated with protected classes, creating the potential for discriminatory outcomes.
• System “black boxes” that lack transparency and make it difficult for developers, businesses and individuals to know whether an automated system is fair.
• Risk for developers to design a system on the basis of flawed assumptions about its users, relevant context, or the underlying practices or procedures it may replace.

Certain legal authorities already apply to the use of automated systems and innovative technologies. Here are some examples from the joint statement:

• The DOL’s Office of Federal Contract Compliance Programs updated its compliance review process to require documentation to better identify discrimination related to AI and automated systems in recruitment, screening and hiring by federal contractors.
• The Consumer Financial Protection Bureau was considering rulemaking to help prevent misuse of Americans’ sensitive information by data brokers.
• The Department of Justice’s Civil Rights Division confirmed that the Fair Housing Act applies to algorithm-based tenant screening services. The Civil Rights Division’s Consumer Protection Branch is leading efforts to investigate and prosecute crimes involving the use of generative AI.
• The Equal Employment Opportunity Commission was investigating workplace discrimination claims related to the use of AI and automated systems in hiring and job placement, and taking enforcement actions, as warranted. (Refer to technical guidance.)
• The Federal Trade Commission  banned a company from using AI-based facial recognition technology for employee surveillance due to improper deployment; the company was required to implement comprehensive safeguards. The commission also required firms to destroy algorithms and other work products that misused data.
• The Department of Education’s Office for Civil Rights investigated allegations concerning the discriminatory use of automated systems in educational technologies and takes enforcement action, as warranted.
• The Department of Health and Human Services’ Office for Civil Rights was finalizing a rule to interpret Section 1557 of the Affordable Care Act to prevent AI-powered algorithms from contributing to bias and discrimination in health care. Its Office of the National Coordinator for Health Information Technology  published a rule to support algorithmic transparency in electronic health records.
• The Department of Homeland Security referred to Policy Statement 139-06, Acquisition and Use of Artificial Intelligence and Machine Learning by DHS  Components as its foundation for the use of AI. It prescribed that the department  will not collect, use or disseminate AI-generated data based on inappropriate consideration of race, ethnicity, gender, national origin, religion, sexual orientation, gender identity, age, nationality, medical condition or disability.
• The Department of Housing and Urban Development said it would enforce fair housing laws to ensure that automated systems are used to increase economic opportunity on an equitable basis.

Next Steps

When implementing AI solutions in the workplace, employers are advised to be cautious with regard to the data they collect and use to support their business objectives. Attorneys recommend having policies in place, including expectations for use and potential consequences for misuse. Mitigation measures may include plans to address cybersecurity threats, AI vendor audits, and training for human resource professionals and managers on the use of AI in hiring.

When AI systems violate or undermine employees’ inherent or statuary legal rights, lawsuits are likely to follow. In addition to federal mandates and guidelines, states are also developing legislation to regulate the use of AI in the workplace. Keeping pace with these developments may require the assignment of a workplace oversight group that includes executives, front-line employees, human resources and information technology team members in consultation with legal counsel, as needed.