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Metaverse in the Workplace: What Do Employers Need to Know?

Client Alert

Emerging technologies are creating a host of new legal issues for employers. The rise of the metaverse has been one of the most anticipated expansions over the last few years. The metaverse is a virtual world that allows users to interact with each other in simulated environments. The metaverse in the workplace has been expanding rapidly as businesses explore the use of virtual reality and augmented reality to improve workflows and communication.

What is the metaverse?  The metaverse is an immersive virtual world. With the use of virtual reality (VR) and/or augmented reality (AR), people can work, play, shop, collaborate, and socialize in a digital world. It is an expansive network of real-time 3D worlds where individuals exist through their avatars. Mark Zuckerberg has described it as a “virtual environment where you can be present with people in a digital space. An embodied Internet that you are inside of.”[1]

With the use of a VR headset, you are immersed in the virtual reality. With AR glasses, you can layer digital information on top of the real world. You can even wear haptic gloves where pressure pads will make it feel as though you are actually touching real objects in the virtual world.

What are the business applications of the metaverse?  While the metaverse is in its early stages of development, there are already several applications for businesses. Employers are using the metaverse for onboarding employees with virtual HR, training employees on processes or procedures through virtual games and tests, and for improving efficiency through the use of AI to support employee performance. The metaverse is also being used for immersive team building and collaboration. From a human capital standpoint, with the expansion of remote work, the metaverse boosts employee engagement as employees are present with the rest of the team in a digital world – regardless of where they all are in the real world.  Employees around the globe can meet through their avatars in the same digital meeting room and work on the same virtual whiteboard.

Metaverse developers are quickly expanding and refining its workforce applications and efficiencies.  It is anticipated that by 2030 5B people will interact in the metaverse and it will be an $8T-$13T industry.[2]  Bill Gates predicts that the metaverse will host most office meetings within two or three years.[3] 

What are the employment law issues of a metaverse workplace? The legal landscape of the metaverse is still unfolding, and much of the current law is related to intellectual property of platforms. However, as more and more businesses are using virtual worlds for trainings, meetings, and other work-related activities, legal issues have arisen.  The employment issues include:

  • Sexual Harassment: Yes, this is a major concern. The EEOC reports that sexual harassment victimizes one out of every four women in the workplace, and it would be foolhardy to think less harassment would take place in the metaverse. In fact, Facebook’s parent company Meta Platforms has already launched a tool to establish virtual personal space boundaries of 1.2 meters between avatars on its platforms to prevent sexual harassment and virtual groping.[4] Until other platforms follow suit, users with haptic gloves and vests can touch and be touched in the virtual world. Additionally, employees will be represented by their avatars, which can mask their identities during verbal harassment and bullying and make the ordinary reporting mechanisms less effective. When implementing or building a platform, the mechanisms to prevent sexual harassment should be an initial consideration for employers.
  • Jurisdiction: This can be a benefit for employers. Until further laws and regulations are inevitably passed, employers will have leeway in deciding which employment laws and regulations will apply to their metaverse workplace. Employers can decide where the platform is located (even internationally) and establish the terms and conditions of use and dispute resolution. A metaverse workspace may allow employers to expand their cultural diversity through hiring around the globe. In building the platform, employers must consider the employment laws, immigration issues, tax implications, and other regulatory concerns before determining the jurisdiction of the platform.   
  • Privacy and Cyber Security: Right now, this is a concern because employers will be collecting significant amounts of data about their employees. Employers must protect the privacy of that information internally and from third-party cyber-attacks. This concern is not overly complex today as each metaverse platform is a closed system. However, this concern will heighten as the metaverse becomes more interactive between platforms and allows users to carry digital information across platform boundaries. 
  • Digital Outsourcing: An anticipated benefit of the metaverse is improving efficiency of operations through artificial intelligence.(*)  Employers can create AI supervisors, advisors, and assistants. The digital supervisor can assign tasks, check for quality, and confirm completion. The digital advisor can be a real-time library of Q&A for your employees as they perform their tasks. The AI assistants can be assigned routine components of tasks while the employees perform the higher leverage and discretionary functions. Employers will need to juggle the potential reductions in workforces with the use of digital assets.    
  • Other Employment Laws: Stay tuned for developments across all areas. From the outset, employers have needed to implement reporting measures to ensure that non-exempt employees are tracking hours worked both in real world and in the metaverse. Because employees will be using digital hardware, employers may be presented with disability requests for accommodation on screens, headsets, usage time, and other impacts of the new technology. Additionally, with any new process or technology, employers can expect user error. If the user error statistically impacts certain protected classes of employees more than non-protected classes and results in adverse employment actions, then employers can be opened to disparate impact claims of discrimination. 
  • Policies and Procedures: Employees will be represented by their avatars in the metaverse. Their bodies, clothing, identities, and behaviors will be their virtual representations designed and implemented by them. This will create the need for a comprehensive suite of policies and procedures in the metaverse.

The metaverse is an opportunity for employers and its technology is evolving. As it evolves, the legal and regulatory issues will continue to develop. For additional information on the metaverse, its implementation in your workplace, or any questions or concerns, please contact Jeffrey C. Miller, 216-658-2323, or any member of the BMD L+E team.

(*) Note from Jeffrey:  Using artificial intelligence is not limited to the metaverse.  I used an open-source artificial intelligence tool to create a substantial portion of this article.