AI for Small Businesses

Digital Assistant Streamlines Compliance

For small businesses, complying with federal and provincial labour code requirements for routine HR processes can be a serious drain on resources.

While some processes are simple – like providing a record of employment when off-boarding an employee – others such as doling out severance or vacation pay depend on individual circumstances and can be complex to calculate, especially for businesses with limited staff, time and money.

As a result, unintentional non-compliance is common with roughly 15,000 complaints related to the Employment Standards Act received by the Ontario Ministry of Labour each year.

Carleton University cognitive science professor, Raj Singh, suggests that non-compliance rates are likely even higher than reported — as many employees don’t file complaints due to unawareness or fear of repercussions.

A man in a blue suit smiles for the camera while standing next to a tree.
Carleton University cognitive science professor Raj Singh

To ensure employees receive what they’re owed and to make it easier for busy business owners to achieve compliance, Singh and his team are creating the first automated digital assistant for off-boarding in Canada.

Revolutionizing Compliance with AI

Singh has partnered with a cloud-based payroll services company PaymentEvolution on the project.

The application leverages state-of-the art artificial intelligence (AI) and cognitive science to answer questions and help users understand their obligations. It even provides a suggested payment amount that complies with labour rules across the country.

The benefit of the platform’s use is significant. Fines can be thousands of dollars, and in severe cases, jail time is possible. It also protects employee rights and saves everyone time, allowing companies to focus on what’s really important: running their business.

A glass door with the logo of digital assistant tool PaymentEvolution engraved on it.

“We want to make compliance easy,” says Singh.

“And we created this tool as a way put the legal knowledge into a machine and teach what the law actually says.”

That’s easier said than done, as labour law is sometimes arcane and often open to interpretation. Each province and territory has its own set of rules and certain professions are federally regulated.

“When you write down the actual code, you get a quantification of how complex this task really is. There is a lot to keep track of. Not just the law itself, but which parts are relevant to the situation,” says Singh. “It is a daunting task.”

Digital Assistant Eliminates Needless Disputes Nationwide

Singh’s application is designed for anyone who could have a stake in the off-boarding process — lawyers, accountants, bookkeepers, human resources professionals, employees and employers. Users input the details, and the digital assistant provides what the payment should be, along with a rationale for why.

“A lot of Canadian small businesses think of HR as a ‘big company’ thing—and almost a dirty word. It’s expensive, and it is a distraction from what they need to do on a day-to-day basis to run their business,” says Sam Vassa, CEO of PaymentEvolution.

But Vassa credits Singh’s Freedom of Information Act request with alerting the company to exactly how widespread non-compliance is. This catalyzed the vision for an automated digital assistant, and PaymentEvolution looked to Singh to help make it a reality.

Singh believes it will eliminate many needless disputes.

“If there is still a dispute, there will at least be a number and report to work with,” he says. “The intent is to help improve the condition for every stakeholder in the game.”

To provide this advice, the digital assistant must interpret the circumstances vis-à-vis the law. Singh and his team looked at the interpretation of labour law in each province and territory to determine what assumptions could be made. But even then, applying this knowledge required judgement.

“Our game is compliance, so our system has to do it right,” says Singh.

“If there were two ways of doing something, we went with the one that affords the greatest benefit to the employee and ensures the employer won’t face legal consequences. We always erred on the side of compliance.”

Student-Led Innovation in Compliance Technology

Establishing trust is a crucial aspect of developing compliance tools. In contrast to typical computer models, this tool offers a transparent audit history, ensuring that both business owners and potential auditors have access to the calculation process details.

“Nothing like this existed before and when you’re developing something for the very first time, you need to write a lot of code,” says Katie Van Luven, a Carleton PhD student in cognitive science who began working on the project in 2019.

A woman wearing glasses poses for a photo outside next to a large tree.
Carleton University PhD student Katie Van Luven

“It took a lot of different skills to do this — computer scientists, accountants and an employment standards lawyer.”

The first versions of the application were clunky and required optimization to reach the launch stage. Some students worked on the project for years, and it has been a launching pad to jobs in AI with students having been hired at PaymentEvolution and others joining industry leaders like IBM.

Singh credits the collaborative nature of the application’s conception for its success.

“This couldn’t have happened but for the team effort,” says Singh. “Everyone believes this is something that should exist. The world would be a better place if workplaces were more compliant and if we see a path for that, let’s make it happen.”

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