Employers are looking to save time and money and are turning to artificial intelligence (AI) to make employment practices more efficient. In early 2024, the U.S. Department of Labor (DOL) issued guidance to help employers navigate the use of AI. The takeaway is that eliminating humans from critical employment processes could result in a violation of federal employment laws. Read on to learn ways to avoid federal wage and hour claims when using AI.

In Texas v. DOL, a federal district judge granted summary judgment (dismissal without a trial) for the state of Texas and various trade groups and blocked the Biden administration’s overtime rule on a nationwide basis.

The U.S. Court of Appeals for the 5th Circuit in New Orleans (which covers employers in Louisiana, Mississippi, and Texas) recently upheld a district court’s decision that two highly compensated IT engineers were not properly paid on a salary basis and, therefore, not exempt from the Fair Labor Standards Act’s (FLSA) overtime requirements. The 5th Circuit’s opinion reiterates that no matter how much money an employee earns, a guaranteed weekly salary must be paid in accordance with the FLSA’s specific rules and regulations to maintain most exemptions from the overtime pay requirements.

I am sometimes asked what lawyers really do for a living? My answer—to hope for the best, plan for the worst. The worst was definitely not planned for in a recent case from Harris County.

Hospitality employers take note: The Department of Labor’s (DOL) tip rule has been struck down. The tip credit is a provision of the Fair Labor Standards Act (FLSA) that allows employers to pay tipped employees a lower direct wage as long as their tips make up the difference to reach the minimum wage. However, the tip credit has been a source of confusion and litigation for many hospitality employers, which have faced conflicting and changing rules from the DOL on how to apply it.

Several states, including Connecticut and New York, have passed laws that require employers to be transparent to applicants and potential applicants when advertising for a job opening. And many other states—including Massachusetts—have pay transparency legislation pending.

In 2018, the U.S. Department of Labor (DOL) filed a complaint against Medical Staffing of America, LLC, and Lisa Ann Pitts (individually and as the owner and officer of Steadfast) asserting violations of the Fair Labor Standards Act (FLSA) for failure to pay overtime wages, improper classification of workers, and failure to maintain adequate and accurate employment records. In 2022, the U.S. District Court for the Eastern District of Virginia agreed with the DOL and concluded Steadfast and Pitts violated the FLSA and owed back pay and liquidated damages. Steadfast and Pitts appealed the determination to the 4th Circuit earlier this year. With over $9 million dollars at stake, all parties await the appeals court’s decision.