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Can AI solve wage theft problems better than workplace regulators?
Fri, 8th Dec 2023

It would be ironic that, amid so much trepidation about the impact of artificial intelligence (AI) on the workforce, that it, and not government regulation, holds the key to ending wage theft in Australia. 
 
As we enter another holiday season, where the incidence of wage theft and poor treatment of casual workers tends to peak, the question many employers will be asking themselves is, will I be impacted accidentally by the passing into law this week of amendments to the Fair Work Act? 
 
While this is a legitimate question, there is a risk that the stigma around AI may also mean those employers are missing an opportunity to get ahead of the dramatic changes coming from the amendments. 
 
AI may keep employers out of jail and improve staff’s working lives 
 
There is no doubt many employees are worried that AI will be weaponised against them. At home and in the workplace, in some kind of Orwellian dystopia, the prospect of our wages, holidays, breaks, shift scheduling and productivity being dictated to by robotic algorithms naturally sounds unappealing. 
 
Images of Big Brother-like cameras and other forms of monitoring come to mind – keyboard stroke analysis, etc.- and are reported in the media as what might happen if AI is used in the workforce management environment. 
 
There is some legitimacy to these concerns, and in fact, governments in Australia and around the world are looking at them. For instance, we note that in its response to the Privacy Act Review this year, the Federal government agreed “in-principle that further consultation should be undertaken with employer and employee representatives on how enhanced privacy protections for private sector employees may be implemented in legislation (proposal 7.1). This should include consideration on how privacy and workplace relations laws should interact…” 
 
But we should also recognise that in a world where technology has more impact than ever on our working lives, all the solutions will come from the government, and the reforms to the Fair Work Act will prove no exception. While many welcome the amendments, which are designed in part to curb or even eliminate the scourge of wage theft (the Fair Work Ombudsman has calculated it costs employees $1.35 billion a year in dollars alone), others remain concerned that they won’t reduce the complexity of workforce management rules - and may even make them worse, at least in the short term. We will leave the politics of that debate to others, suffice to repeat - Australia has the most arcane, complex and unwieldy workplace laws in the Western World, and while reform is usually good, relying on it to improve productivity, make workers happier and fairly paid, is naive. 
 
Will the new industrial laws alone stop wage theft? 

Moreover, as necessary as legal reform is to the workplace, given the epidemic of wage theft, it can only play a limited role. Indeed, employers, their industry associations and others have raised legitimate questions about the real-world applicability of some elements of the new laws and their potentially negative impact on business confidence. 
 
Can we expect the new laws – or State-based workplace reform – to simplify these historical complexities radically? 
 
AI can help - not hinder - the adaptation to a new workforce landscape 
 
To ensure that thousands of businesses can adapt to the new legal and ethical workforce landscape and avoid being publicly embarrassed/fined/sent to jail for wage theft or other breaches of the Act, it is vital that companies use every automation tool they can get hold of. 
 
So far, there is little evidence that this is happening. Recent research indicates that while some businesses are adopting AI in areas like marketing and sales, few consider it as a strategic asset in their workforce management. 
 
There are exceptions. 
 
Clients have started deploying AI to help them more effectively allocate shifts, reward staff, train and upskills them, and otherwise make them productive, happy people who want to stay long-term in an environment where they can very easily walk down the road and get another job. 
 
This isn’t invasive or Big Brother behaviour. In fact, it’s the opposite. 
 
For example, only AI is capable of analysing hundreds of workers in a workplace, understanding their relative skills, availability (including casual staff), their requests for specific shifts, and providing options for HR managers to proactively create the most effective workplace - and do this within budgets, and to meet whatever compliance is relevant. 
 
AI applications achieve this by categorising, examining and creating actionable options from the data from dozens of inputs of previous interactions in the workforce management environment. By maximising the interaction of, say, which worker has the best skills for a certain role at a certain place and time and aligning them to availability, worker preferences, awards and other costs, AI can not only create efficient scheduling much faster than a human can, it can also do it in a way which actually improves workforce equity. 
 
It also enables staff to request shifts, leave, training and other options which could not previously be provided in a timely and transparent manner. Only AI tools can predict which shifts will be busiest, allocate the right staff to the right role at the right time, and vitally allow those staff to see what options are available to them ahead of time and allow them actively to participate in the process. It can remove the need for reliance on out-of-date, manual spreadsheets, saving managers time and improving productivity – and of course, it can play a key role in ensuring that guard rails exist around the workforce, so staff are paid appropriately, and in fact, are not overpaid, as happens regularly with the old-world systems. AI can easily produce auditable reporting, which can be used in cases where employers are accused of wage theft. 
 
Compare that with the common, traditional, manual spreadsheet approach to workforce management, which the majority of Australian organisations continue to rely on and which will risk too many companies being caught out in the wake of the amendments to the Fair Work Act.