How It Works

The ODU Accord

How an ODU Accord works

Three steps that turn an AI transition into a fair, verifiable commitment.

Step 01📢

Company announces the transition

A company planning to deploy AI or robots that replace workers announces the transition on the ODU Platform — publicly, before it happens. Affected workers are notified and invited to the platform. The transition is timestamped as public record from day one.

Step 02⚖️

ODU independently calculates the Displacement Compensation

The ODU Audit System — a multi-agent AI infrastructure — independently assesses the economic impact of the transition and produces the company's Displacement Effect Index (DE Index). Workers see their individual monthly share. 65% must vote to accept before the Accord proceeds.

Step 03💸

Company pays. ODU distributes. Workers receive.

The company signs the ODU Accord and makes one monthly Displacement Compensation payment to ODU. ODU distributes each worker's share directly to their account — not through the company. The Accord and its status are permanently recorded in the public ODU registry.

The company retains the majority of AI efficiency gains. Workers receive an ongoing monthly Displacement Compensation for as long as the system runs. The transition is permanently recorded in the public ODU registry. Nobody is simply discarded.

The calculation

How the DE Index is calculated

The Displacement Effect Index is not an estimate or a negotiation. It is independently computed from verified financial, operational, and market data. Here is the exact methodology — in full.

Step 01

Monthly Displaced Payroll (MDP)

MDP = (1/12) × Σᵢ Sᵢ

Sᵢ = verified annual salary of worker i, sourced directly from payroll records. n = total number of displaced workers. MDP is the aggregate monthly wage value the company no longer pays — the baseline from which all further calculations derive.

Step 02

AI System Monthly Total Cost (ASTC)

ASTC = P/L + M + O

P / L

Acquisition or licensing cost amortised over system lifetime L (months, min 36, capped 120)

Average monthly maintenance, support, and infrastructure cost from vendor contract

Monthly human oversight cost — operators, trainers, and supervisors retained for the AI system

Step 03

Net Monthly Efficiency Surplus (NMES)

NMES = (MDP × EM) − ASTC
EM = AI_Output_Index / Worker_Baseline_Index

The Efficiency Multiplier (EM) captures how much more productive the AI system is relative to the workforce it replaces. It is derived from vendor-supplied throughput benchmarks cross-referenced against independent third-party audits and ODU's benchmark library — vendor claims cannot be accepted without verification. If NMES ≤ 0, no economic surplus exists and no Accord is required.

Step 04

The DE Index Score (0–100)

DE = 0.20·R_w + 0.25·R_p + 0.40·R_s + 0.15·H

R_w

20%

Labour Displacement Ratio

n / N

Labour Displacement Ratio

n / N

Displaced workers as a fraction of total company workforce

R_p

25%

Payroll Displacement Ratio

MDP / total monthly payroll

Payroll Displacement Ratio

MDP / total monthly payroll

Displaced payroll as a fraction of total company payroll

R_s

40%

Surplus-to-Payroll Ratio

NMES / MDP, clipped to [0, 1]

Surplus-to-Payroll Ratio

NMES / MDP, clipped to [0, 1]

The net gain captured per unit of displaced payroll — the primary driver

15%

Hardship Coefficient

(U_r + (1 − S_r) + A_f) / 3

Hardship Coefficient

(U_r + (1 − S_r) + A_f) / 3

Local unemployment rate, skills replaceability score, age vulnerability factor

The Hardship Coefficient H = (U_r + (1 − S_r) + A_f) / 3, where U_r is the local unemployment rate normalised to the national benchmark, S_r is the skills replaceability score from occupational databases (O*NET or equivalent), and A_f is the age vulnerability factor — the proportion of displaced workers aged 50 or above. All components are normalised to [0, 1] before weighting.

Step 05–06

Compensation Rate & Monthly Displacement Compensation

κ(DE) = 0.20 + 0.25 × (DE / 100)← scales 20%→45% with DE Index

DC_monthly = NMES × κ(DE), min 0.15 × MDP← 15% floor regardless of NMES

The Compensation Rate κ scales linearly with the DE Index — a DE of 0 produces a 20% share of NMES; a DE of 100 produces 45%. The 15% of MDP floor ensures workers always receive meaningful compensation even in low-surplus transitions.

Step 07

Per-Worker Distribution — The ODU Formula

Pᵢ = DC_monthly × [ 0.70 × (Sᵢ / Σ Sⱼ) + 0.30 × (Tᵢ / Σ Tⱼ) ]

Sᵢ / Σ Sⱼ

Salary weight (70%)

Worker i's annual salary as a fraction of total displaced payroll

Tᵢ / Σ Tⱼ

Seniority weight (30%)

Worker i's years of service as a fraction of total service years across all displaced workers

The formula is published, fixed, and auditable — part of the ODU Standard. In homogeneous workforces it produces near-equal distributions. In mixed workforces it reflects the real economic loss of each individual.

Step 07 — Distribution

Acme Logistics: $12,012 split across 4 workers

Steps 01–06 (above) produced a verified Monthly Displacement Compensation of $12,012. Step 07 now splits that pool between the four displaced workers using the 70 / 30 salary-seniority formula.

WorkerMonthly salaryYearsSalary weightSeniority weight

Maria$4,2008 yrs26.3%28.6%

James$3,8003 yrs23.8%10.7%

Aisha$4,60012 yrs28.8%42.9%

Carlos$3,4005 yrs21.3%17.9%

Total$16,00028 yrs100%100%

Payment breakdown

Maria

P = $12,012 × [ 0.70 × 26.3% + 0.30 × 28.6% ]

salary 26.3%seniority 28.6%$3,237/mo

James

P = $12,012 × [ 0.70 × 23.8% + 0.30 × 10.7% ]

salary 23.8%seniority 10.7%$2,383/mo

Aisha

P = $12,012 × [ 0.70 × 28.8% + 0.30 × 42.9% ]

salary 28.8%seniority 42.9%$3,962/mo

Carlos

P = $12,012 × [ 0.70 × 21.3% + 0.30 × 17.9% ]

salary 21.3%seniority 17.9%$2,430/mo

Total distributed this month

$12,012

Why does Aisha receive the most?

Aisha earns the highest salary and has the longest tenure. Both components work in her favour. The seniority component is the key differentiator — her 12 years represent 42.9% of the team's combined service, far above her 28.8% salary share. The 30% seniority weight protects long-tenure workers — reflecting the deeper disruption of a longer career interrupted.

Data the ODU Audit System requires

FROM THE COMPANY

Full payroll roster of displaced workers (salary + start date)
Total company headcount and payroll
AI system acquisition cost and contract terms
Vendor throughput benchmarks and system specifications

FROM INDEPENDENT SOURCES

Third-party AI productivity benchmarks for the system category
National wage data (BLS, ONS, or equivalent)
Regional unemployment data for displaced workers' locations
Occupational replaceability scores (O*NET or equivalent)

ODU AUDIT AI AGENTS COMPUTE

Cross-reference vendor claims against independent benchmarks
Apply industry-specific efficiency modifiers
Calculate H (Hardship Coefficient) from demographic data
Produce DE Index score with ± confidence interval

Formal Challenge Process

Either party — company or worker group — may formally challenge a DE Index result within 30 days of the DE Index Report. Disputes are reviewed by an independent three-member adjudication panel and resolved within 60 days. During the challenge period, the proposed Displacement Compensation is held in escrow. The panel's ruling is final and permanently recorded in the public ODU registry.

Case Study · All Six Steps

How $12,012 is calculated

Every number is derived from verified inputs. Nothing is estimated or rounded until the final step. This is a complete run of the ODU Audit System for one transition — reproduced in full so any party can check, challenge, or replicate it.

Scenario — Acme Logistics LLC

Company

Acme Logistics LLC

Location

Riverside County, CA

Workforce

40 employees

Monthly payroll

$128,000

System deployed

4× autonomous picking robots (AMR)

Acquisition cost

$420,000

Workers displaced

NameAnnual salaryMonthlyTenure

Maria Chen$50,400$4,2008 yrs

James Okafor$45,600$3,8003 yrs

Aisha Patel$55,200$4,60012 yrs

Carlos Mendez50+$40,800$3,4005 yrs

Total$192,000$16,00028 yrs

Step 01

Monthly Displaced Payroll (MDP)

MDP = (1/12) × ($50,400 + $45,600 + $55,200 + $40,800)
= (1/12) × $192,000
MDP = $16,000/month

Salaries sourced from Acme Logistics payroll records, cross-referenced against submitted tax filings. MDP is the aggregate monthly wage value the company no longer pays — the baseline for all further calculations.

Step 02

AI System Monthly Total Cost (ASTC)

P / LAcquisition amortised

$7,000/mo

$420,000 ÷ 60 months

ODU minimum lifetime: 36 months. Acme's robotics contract specifies 60 months. Vendor confirmed. L is locked at the purchase contract date — see Provision §2.

MMaintenance + software subscription

$2,000/mo

Monthly vendor SLA + WMS licence

Sourced from vendor service agreement, verified against Acme invoice records.

OHuman oversight retained

$1,800/mo

0.3 FTE warehouse supervisor @ $72,000/yr

$72,000 × 0.3 ÷ 12 = $1,800/month. Supervisor retained for exception handling and robot maintenance coordination.

ASTC = $7,000 + $2,000 + $1,800 = $10,800/month

Step 03

Net Monthly Efficiency Surplus (NMES)

Efficiency Multiplier — Audit Trail

Vendor claim: 4.2× throughput

GreyOrange product specification states 4.2× order-line throughput vs. human picking baseline under controlled warehouse conditions. This figure cannot be accepted without independent verification.

ODU audit result: 3.00× verified

Deloitte Supply Chain benchmarking — an ODU-certified independent auditor with no vendor affiliation — assessed Acme's specific floor layout, SKU variance, and exception rate. Verified throughput on Acme's actual operation: 3.00×. Vendor claim reduced by 28.6%. EM = 3.00 is the figure used. Auditor independence is mandatory — see Provision §1.

NMES = (MDP × EM) − ASTC
= ($16,000 × 3.00) − $10,800
= $48,000 − $10,800
NMES = $37,200/month

R_s check: NMES / MDP = $37,200 / $16,000 = 2.325 → clipped to 1.000. The AI surplus exceeds the displaced payroll. The surplus-to-payroll component carries maximum weight in the DE Index.

Step 04

DE Index Score

R_w — Labour Displacement Ratioweight 20%

n / N = 4 / 40 = 0.100 → 0.20 × 0.100 = 0.0200

4 of Acme's 40 employees are displaced — 10% of the workforce.

R_p — Payroll Displacement Ratioweight 25%

MDP / total payroll = $16,000 / $128,000 = 0.1250 → 0.25 × 0.1250 = 0.0313

The displaced team's wages represent 12.5% of Acme's total monthly payroll.

R_s — Surplus-to-Payroll Ratioweight 40%

NMES / MDP = $37,200 / $16,000 = 2.325 → clipped to 1.000 → 0.40 × 1.000 = 0.4000

The net AI surplus is 2.33× the displaced payroll — well above the clip threshold of 1.0. Maximum weight on this component.

H — Hardship Coefficientweight 15%

U_rLocal unemployment0.408

(7.3% − 2.0%) ÷ (15.0% − 2.0%) = 5.3 ÷ 13.0

Riverside County: 7.3%. National: 4.1%. U_max = 13.0 percentage-point spread, derived from BLS LAUS Great Recession peak (10.0% in October 2009) plus 3 pp headroom. This value is fixed in the v1 standard — see Provision §3.

1 − S_rSkills non-replaceability0.150

1 − 0.85 (O*NET SOC 53-7062)

Warehouse material movers score 0.85 automability on O*NET task analysis. Low non-replaceability — these roles ARE highly automatable. Source: published O*NET-SOC database (no company-commissioned override permitted — see Provision §6).

A_fAge vulnerability0.250

1 worker aged 50+ (Carlos, 53) ÷ 4 total

Carlos Mendez (53) is the sole worker over 50.

H = (0.408 + 0.150 + 0.250) ÷ 3 = 0.808 ÷ 3 = 0.2692 → 0.15 × 0.2692 = 0.0404

DE = 0.20×0.100 + 0.25×0.1250 + 0.40×1.000 + 0.15×0.2692
= 0.0200 + 0.0313 + 0.4000 + 0.0404
= 0.4916
DE Index = 49.16 / 100

Step 05–06

Compensation Rate & Monthly Displacement Compensation

κ = 0.20 + 0.25 × (DE / 100)
= 0.20 + 0.25 × (49.16 / 100)
= 0.20 + 0.25 × 0.4916
= 0.20 + 0.1229
κ = 0.3229 (32.29% of NMES goes to workers)

DC_monthly = NMES × κ = $37,200 × 0.3229

= $12012.20 → rounded to $12,012

Floor check: 0.15 × MDP = 0.15 × $16,000 = $2,400 ← not triggered (DC well above floor)

A DE Index of 49.2 sits just below the midpoint. Acme's score is constrained mainly by the low R_w (10% of workforce) and R_p (12.5% of payroll) — this is a targeted displacement of a single team, not a mass redundancy event. The 32.3% compensation rate means the workers receive $12,012 of the $37,200 monthly net surplus Acme captures each month from the automation.

Final result — Step 06 output

$12,012/month

Medium

The rule

The O*NET-based skills-replicability index S_r used in Step 04 must be drawn from the published O*NET-SOC database directly, OR assessed by an ODU-certified independent labour analyst. Company-commissioned O*NET assessments are not accepted as audited inputs.

Gaming vector this closes

A company-commissioned O*NET study has incentive to overstate replicability, which lowers (1−S_r), reduces H, lowers DE, and reduces DC. Each 0.10 unit of A_f manipulation shifts DC by ~$140/month.

Money at stake

$140/month per 0.10 of A_f

Each Provision is derived from a finding in the formal ODU mathematical audit. The audit is reproducible, public, and re-run on every revision of the Standard.

Read the full audit →

Common questions

What is the Displacement Compensation?

The Displacement Compensation is the monthly payment a company makes to ODU, which then distributes individual shares directly to each displaced worker. It is not a fine or severance supplement — it is a structured share of the net economic gain the company captures by replacing human labour with automated systems. It is paid for the operational lifetime of the system, or the agreed Accord term.

How is each worker's monthly share calculated?

The ODU Distribution Formula splits the monthly compensation pool using two weighted pools: 70% is distributed by salary (each worker's share proportional to their salary as a % of total displaced payroll) and 30% by seniority (each worker's years of service as a % of total years across all displaced workers). The formula is published, fixed, and auditable — part of the ODU Standard.

How is the Displacement Compensation amount determined?

The ODU Audit System — a multi-agent AI infrastructure — independently assesses the transition and produces the company's Displacement Effect Index (DE Index). It considers the aggregate displaced wages, the AI system's documented efficiency output and operating cost, the system's expected lifetime, and industry benchmarks. A company cannot submit its own efficiency figures without independent verification.

What if workers don't accept the Accord?

An ODU Accord requires 65% of affected workers to vote to accept before it proceeds. Workers who declined are still bound by the majority outcome and receive their share. If the 65% threshold is not reached, the Accord does not proceed — the company does not receive ODU Committed status for that transition.

Is the ODU Accord legally binding?

The ODU Accord is a voluntary commitment agreement — not a legally enforced contract. Companies adopt it because they believe in the obligation it represents, or because their customers, employees, and investors expect it. If a company stops paying, ODU marks the Accord as Lapsed publicly, suspends their ODU Committed designation, and the record remains permanently visible in the public ODU registry.