Author(s): Julie Adams (FordHarrison), Angela Cummings (FordHarrison), Hannah Price (Lewis Silkin), Alvaro Gonzalez-Schiaffino (Basham, Ringe y Correa), Fadi Sfeir (Capstan), José Carlos Wahle (Veiranos Advogados), Alexander Ulrich (Kliemt & Vollstädt)
While automation in the workplace has been used for decades to improve speed, efficiency and cost effectiveness, until recently, automating work requiring judgment and perception was reserved for science fiction films. In the last five years, however, the wide availability of powerful computer chips, big data storage and processing, and inexpensive sensors, as well as the development of new algorithms, have led to improvements in “cognitive computing” and “artificial intelligence” (AI). As a result, machines are increasingly being used to perform a range of responsibilities previously performed by humans. For example, a Buddhist temple in China has welcomed a robot monk into its order in an effort to attract new practitioners. In June 2016, two Belgian hospitals introduced a humanoid assistant named Pepper to greet patients. While robotic versions of human employees will not be replacing entire workforces any time soon, companies are integrating AI-powered systems in the workplace to enhance their decision-making processes. These emerging technologies will significantly impact the white-collar workforce, making it essential that companies understand the legal risks associated with the use of these technologies.
Important Technologies Impacting the Workplace
In a report published by the McKinsey Global Institute in 2013, entitled Disruptive technologies: Advances that will transform life, business, and the global economy, researchers identified five technologies that are already beginning to impact the workplace:
- Mobile internet. Refers to mobile computing devices, high-speed wireless connectivity, and applications, which allow users to perform knowledge work tasks involving natural language, voice recognition, gestures and the like. In the coming years, these devices will be intuitive, wearable, and reliant on sensors. For example, an Audi plant in Germany recently began using a glove with an embedded barcode scanner with its logistics employees to make work more ergonomic and efficient.
- Automation of Knowledge Work. Refers to “the use of computers to perform tasks that rely on complex analyses, subtle judgments, and creative problem solving.” Complex jobs tied to engineering, creativity, and social intelligence, and other non-routine tasks like medical diagnosis, are knowledge activities susceptible to automation. One example of this is Quill, a program developed in the U.S. that processes data and generates journalistic style reports. Another example is IBM’s Watson computer, which is being used to diagnose cancer patients.
- Advanced Robotics. Refers to the “increasingly capable robots with enhanced senses, dexterity, and intelligence used to automate tasks or augment humans.” The use of robotics may result in displacement of some employees, but may also assist employees with manual tasks by providing physical strength and stability. Robots will also allow employees to work remotely, as in the case of telepresence robots.
- The Internet of Things (“IoT”). The IoT refers to the use of various sensors, actuators, and data communications technology built into physical objects so those objects can be tracked, coordinated, or controlled across a data network or the Internet. Amazon is developing cashier-free grocery stores using IoT-enabled devices, allowing customers to purchase items using their smartphones.
- Cloud Computing. Cloud computing refers to “the use of computer hardware and software resources delivered over a network or the Internet, often as a service.” The cloud allows businesses to provide services in innovative ways through an Internet connection. Advances in cloud technology have led to a new business model -- the "gig" economy -- that connects users with desired goods or services through smartphone applications that also process payments. Examples of businesses built on cloud computing technology include on-demand transportation like Lyft or Uber and lodging rental-sharing services like Airbnb.
Underlying all of these technologies, of course, is “big data,” which is a general term referring to vast amounts of information that organizations collect and use to derive insights about behaviors and trends.
Legal Implications of the Trends
With the above technology trends in mind, employers should consider the applicability of existing laws and regulations when introducing new technologies in the workplace. Several labor and employment law issues that may be implicated, both domestically and internationally, are discussed below.
- Discrimination in Hiring. Discrimination issues can arise at the outset of the employment relationship with the use of big data and robots during the hiring process. The Equal Employment Opportunity Commission, the U.S. federal agency authorized to enforce anti-discrimination laws, has met with experts to discuss how “big data” is being used to make hiring and other employment decisions. Accordingly, U.S. companies should consider state and federal anti-discrimination laws when developing hiring processes reliant on big data.
- Disability. The use of robotics and other technology may also implicate U.S. disability laws. Various types of robotic applications could enable qualified individuals with disabilities to perform their essential job functions. Therefore, U.S. employers should be prepared to accommodate employees who request to use such equipment. Further, over time, technological advances and automation may make telecommuting more feasible, meaning U.S. employers may need to rethink their telecommuting policies.
- Health and Safety. Robotics can also be used to perform unsafe, hazardous, highly repetitive, and unpleasant tasks. Although this can be beneficial to workers, the integration of technology into workplaces presents new and different hazards. The Occupational Safety and Health Administration has published Guidelines for Robotics Safety, but currently there are no mandatory standards specific to the robotics industry. Despite the lack of express standards, in 2015 a textile manufacturer was hit with $108,800 in penalties for exposing workers to unguarded machinery that included robots. In the absence of more current guidance, standards published by the American National Standards Institute serve as a good resource for employers who are seeking to address safety and health issues involving robots and advanced technologies.
Fadi Sfeir, Associate at CAPSTAN, advises that when introducing a new technology that may impact employment or working conditions in France, employers must consult the Works Council and the Health and Safety Committee. According to Sfeir, the Committee may appoint an external expert to assess the consequences of the introduction of the technology.
- Wage and Hour. With mobile internet devices and IoT allowing 24/7 connectivity, it is critical for U.S. employers to establish control over worktime to reduce the risk of noncompliance with state and federal wage and hour laws.
- Worker Misclassification under the New “Gig” Economy Business Model. Under these “gig” arrangements, individuals contract with organizations for temporary, short-term engagements. The worker can choose when she will work and how often vis-à-vis a mobile app. The app companies serve as intermediaries who connect the workers with the customers. In recent litigation, app-based workers have argued that they should be classified as employees, not independent contractors. In the U.S., Uber workers have received favorable rulings from state agencies, but the issue of employee classification in the gig economy remains a gray area. Uber workers in the United Kingdom recently received a favorable ruling from an employment tribunal, according to Hannah Price, Partner at Lewis Silkin. Price reports that the tribunal ruled that Uber drivers are “workers” and are entitled to certain basic rights, including the right to the national minimum wage and paid annual leave.
- Job Eliminations Resulting from Automation and Retraining Obligations. As the automation of knowledge continues to develop, technology will inevitably displace some human employees. A report published by McKinsey and Company in 2016 indicates that while a few occupations will be automated in their entirety, certain activities are more likely to be automated, requiring entire business processes to be transformed and jobs performed by people to be redefined. Whether automation results in job elimination or the redefinition of jobs, numerous employment laws are implicated.
When making layoff and termination decisions, employers should ensure that age or other protected categories do not play a factor in decision-making. Federal U.S. law protects employees age 40 and older from employment discrimination. Similarly, Lewis Silkin Partner Hannah Price advises that older workers in the United Kingdom who consider themselves side-lined as a result of perceived lack of technological skills may potentially have a claim for age discrimination.
Further, in the case of a group layoff, U.S. employers should ensure compliance with federal and state laws that require advance notice before certain layoffs can be implemented. For group layoffs in Mexico, displaced workers may be eligible to receive enhanced compensation and benefits, according to Alvaro Gonzalez-Schiaffino, Partner at BASHAM, RINGE Y CORREA S.C.
If jobs are redefined, training may be necessary. Except for health and safety training, U.S. employers are under no general legal obligation to pay for (or sponsor) occupational or work-related training designed to enhance employees' qualifications and skills. Displaced employees may, however, be eligible to receive education and training from federal and state agencies.
In sum, as companies invest in computers and robotics to modernize their processes, organizations should consider the range of employment and labor laws that may be implicated and how courts and regulators are likely to apply them. Companies should also keep an eye out for legal developments as the law evolves to address new challenges presented by the tech-driven intelligent workplace.