Danger, Employers, Danger! Is AI Quietly Turning Your “Exempt” Employees Into Overtime Workers?

Florida employers are leaning into artificial intelligence for scheduling, pricing, HR screening, and even management decisions. That makes business sense, but it also raises a quieter question: at what point does AI change jobs so much that a previously “exempt” employee becomes overtime-eligible under the Fair Labor Standards Act (FLSA)?

The law has not changed. The duties tests for the executive and administrative exemptions are the same. What is changing is what people actually do all day, especially in Florida’s big employment sectors like hospitality, tourism, healthcare, logistics, and financial services, where AI tools are arriving fast.

When software takes over independent judgment, or automation cuts headcount so that a “manager” no longer supervises enough people, the factual basis for an exemption can evaporate.

Quick refresher: the two key exemptions

The executive exemption under 29 C.F.R. part 541 requires, among other things, that the employee’s primary duty is management and that they “customarily and regularly” direct the work of at least two full-time employees or their equivalent, with real authority over hiring, firing, or significant status changes

The administrative exemption requires office or non-manual work “directly related to management or general business operations” and a primary duty that includes “the exercise of discretion and independent judgment with respect to matters of significance.”

The regulations (29 C.F.R. § 541.202) emphasize that employees who merely apply well-established procedures are not exercising the level of judgment the administrative exemption requires.

That is exactly where AI can change the analysis.

When AI erodes “independent judgment” for administrative staff

In many Florida workplaces, generative AI and automated decision tools are already embedded in pricing models, underwriting, credit decisions, and HR processes. McKinsey’s 2023 AI survey found that roughly one-third of organizations use generative AI regularly across at least one business function, and adoption is highest in functions such as marketing, sales, operations, and software development.

Brookings’ 2024 analysis of OpenAI exposure data estimated that more than 30 percent of U.S. workers could see at least half of their job tasks affected by generative AI, and about 85 percent could see at least 10 percent of their tasks affected.

Those are precisely the workers who tend to be classified as exempt “administrative” staff. When AI systems make the actual decisions and employees implement or lightly review them, plaintiffs may argue that the employees no longer exercise discretion and independent judgment on matters of significance.

In a Florida context, imagine:

• A “risk analyst” whose core job becomes feeding data into an AI engine and escalating any nonstandard output according to a script, rather than weighing options and recommending strategies; or

  
  

• An “HR generalist” who follows AI-generated recommendations on hiring and promotion unless a clear error appears on a checklist.

On paper, these may still sound like high-level roles. The employee may now be applying rules to AI output rather than exercising meaningful independent judgment. The more tightly the workflow is locked to system recommendations, the weaker the administrative exemption becomes.

Automation, headcount, and Florida’s executive exemption risk

For executives, the structural risk is simpler: the test still expects supervision of at least two full-time employees or the equivalent. If automation reduces headcount so that your “manager” now has only one direct report, or supervises a revolving set of part-timers that do not add up to two full-time equivalents, the exemption is on thin ice.

There is solid evidence that automation and robotics reduce certain kinds of employment. Daron Acemoglu and Pascual Restrepo’s “Robots and Jobs: Evidence from US Labor Markets” found that additional industrial robots in local labor markets were associated with lower employment and wages.

Florida is squarely in the conversation about AI-related displacement. A 2024 report cited in coverage of a Florida Senate bill found that Florida workers were the most at risk in the country for AI-related job displacement, with three Florida metro areas among the top five for AI-driven automation, including Jacksonville at number 4.

When those reductions occur in departments led by working supervisors, frontline managers, or assistant managers, you can end up with well-paid “exempt” employees who no longer actually supervise enough people to qualify as executives under the FLSA.

What regulators have (and have not) said about AI and wage and hour law

On April 29, 2024, the U.S. Department of Labor’s Wage and Hour Division issued Field Assistance Bulletin (FAB) 2024-1 on “Artificial Intelligence and Automated Systems in the Workplace under the Fair Labor Standards Act and Other Federal Labor Standards.” The FAB warned that AI tools used for timekeeping, productivity monitoring, leave administration, and similar functions do not relieve employers of their wage-and-hour obligations and may create compliance risks if not monitored. That bulletin was later withdrawn after the executive order that prompted it was revoked, but the document and the commentary around it still provide a useful roadmap of the issues investigators were watching: off-the-clock work, automated meal break deductions, and retaliation through AI-driven monitoring.

Notably, the DOL has not issued formal guidance on the question we are discussing here: when AI and robotics change employees’ actual duties to the point that white-collar exemptions no longer apply. For now, that space is filled by the regulations, the fact sheets, and a growing body of private commentary from employment lawyers.  

In other words, regulators are clearly saying “AI does not suspend the FLSA,” but they have left the exemption-specific questions to case-by-case analysis.

Checklist for Florida employers: putting an “AI lens” on your exemption audit

Here is a practical checklist to consider during a wage and hour review:

• Inventory AI and automation in exempt roles. Identify every AI or automated system that touches the day-to-day work of employees you currently treat as exempt administrative or executive staff, including scheduling tools, pricing engines, HR screening tools, and robotics.

  
  

• For administrative staff, map real decision-making. Ask, task by task: who is actually weighing options and making the call on “matters of significance,” and who is following system recommendations or checklists tied to AI output.

  
  

• For executives, verify the span of control after automation. Confirm in writing that each exempt “manager” still customarily and regularly supervises at least two full-time employees or the equivalent, even after headcount reductions tied to AI or robotics.

  
  

• Document human oversight of AI. Where you rely on AI outputs in areas that used to be core judgment tasks, build and document a review layer where exempt employees can and do override the system based on reasoned evaluation.

  
  

• Align job descriptions with reality. Update job postings and internal descriptions to accurately reflect how AI is used and the human employee’s primary duty. Outdated descriptions that still talk about human decision-making can be damaging in litigation.

  
  

• Plan for reclassification where duties have shifted. If AI has materially hollowed out judgment or supervision in a role, be prepared to reclassify the position to non-exempt, adjust compensation, and manage morale and scheduling issues that follow.

  
  

• Train supervisors on AI-related wage-and-hour risks. Make sure Florida managers understand that AI tools are not a shield. They need to watch for off-the-clock work driven by after-hours alerts, algorithmic productivity quotas, and similar practices that can give rise to FLSA claims.

  
  

• Monitor Florida-specific developments. Track state legislation and local studies on AI and the workforce, since Florida has already been identified as unusually exposed to AI-related job disruption. That context will matter in future litigation and policy debates.

AI does not automatically destroy FLSA exemptions, and not every tool that supports decision-making is a problem. The risk is subtle: as more judgment and supervision migrate into software, jobs change, sometimes faster than job descriptions and exemption classifications. For Florida employers, now is the time to look at those changes with a wage and hour lens, before plaintiffs’ lawyers and investigators do it for you.