Littler Survey Shows Employers Grappling With Regulatory, Social Changes

Fifth annual report finds widespread concern with new overtime rules
and other major regulatory matters, increased movement of social issues
into the workplace

SAN FRANCISCO–(BUSINESS WIRE)–#HR–Littler, the world’s largest employment and labor law practice
representing management, has released the results of its 2016 Executive
Employer Survey. The fifth annual survey, completed by 844 in-house
counsel, human resources professionals and C-suite executives from some
of America’s largest companies, examines the key legal, economic and
social issues impacting employers as the 2016 presidential election
approaches.

Click
here for the 2016 Executive Employer Survey Infographic

New Overtime Rules, Aggressive DOL Enforcement
Plague Employers

The Department of Labor (DOL) has advanced several regulatory
initiatives that have brought the agency’s enforcement of federal
employment laws more to the forefront for employers. The vast majority
of respondents to this year’s survey (82 percent) expect DOL
enforcement to have an impact on their workplace over the next 12
months, with 31 percent anticipating a significant impact (up
from 18 percent in the 2015 survey).

This concern is no doubt driven in large part by the recently finalized
Fair Labor Standard Act “white collar” overtime regulations that
drastically increase the number of Americans who can qualify for
overtime pay. Although respondents completed the survey in the weeks
prior to the release of the final rule, 65 percent had already
conducted audits to identify affected employees.

“Employers are clearly feeling the impact of the DOL’s increasingly
aggressive regulatory agenda, most notably the new overtime
regulations,” said Littler attorneys Tammy McCutchen and Lee Schreter in
a joint statement. “While it is encouraging that the majority of
respondents started to prepare before the rule was finalized, more than
a quarter (28 percent) said they had taken no action given delays
in the rulemaking process. Given that the reclassification process can
take up to six months and the rule is unlikely to be blocked from going
into effect on December 1, 2016, employers should move quickly to ensure
compliance.”

Further, in ranking the priority they expect a presidential candidate
from each party to place on various issues, the majority of respondents (75
percent) said income inequality (e.g., overtime rules, state equal
pay, minimum wage laws, etc.) would be a significant priority of the
Democratic candidate. This is in comparison to only 4 percent who
felt income inequality would be a significant priority of the Republican
candidate.

Joint Employer, ACA among Top Regulatory and
Legislative Issues Facing Workplace

Increased DOL enforcement is just one example of employers grappling
with a continuously shifting regulatory and enforcement landscape, as
federal agencies continue to be the governmental bodies inflicting the
most pressure on employers.

With the National Labor Relations Board’s recent expansion of the
definition of a “joint employer,” 70 percent of respondents
expect a rise in claims over the next year based on actions of
subcontractors, staffing agencies and franchisees. Approximately half of
respondents predicted higher costs (53 percent) and increased
caution in entering into arrangements that might constitute joint
employment (49 percent).

“It is significant and telling that only 2 percent of respondents
said the expanded definition of a joint employer will have no impact on
their workplace,” said Michael Lotito, co-chair of Littler’s Workplace
Policy Institute. “This finding shows the breadth of the NLRB’s
decision, overturning a standard of joint employment that had been in
place for decades, which required a relationship that was actual, direct
and substantial.”

As was the case in the 2015 survey, 85 percent of employers said
the Affordable Care Act (ACA) would have an impact on their workplace in
the next 12 months. While two-thirds said they do not expect a repeal of
the ACA if a Republican is elected president this fall, respondents saw
a greater likelihood of changes to individual provisions. Fifty-three
percent said a Republican administration could lead to a repeal of
or changes to the Cadillac excise tax and 48 percent saw a
likelihood for changes to the play-or-pay mandate.

Rising Public Attention to Social Issues
Influences the Workplace

Employers have always had to keep an eye on demographic and social
trends, but as information spreads more rapidly and as office culture
shifts to accommodate a new generation, today’s companies are
increasingly experiencing the incursion of social issues into the
workplace.

In the largest year-over-year change in Littler’s survey results, 74
percent of respondents expect more discrimination claims over the
next year related to the rights of LGBT workers (up from 31 percent
in 2015) and 61 percent expect more claims based on equal pay (up
from 34 percent in 2015). This change is driven by LGBT
discrimination and equal pay ranking among the top enforcement
priorities for the Equal Employment Opportunity Commission (EEOC), but
it also mirrors key focus areas for the Obama administration, government
efforts at the state and federal levels, and increased public awareness.

“The EEOC has sent a clear signal that it will continue to prioritize
rooting out discrimination based on sexual orientation and equal pay, so
employers’ instincts that claims in this area will likely rise are right
on the mark,” said Barry Hartstein, co-chair of Littler’s EEO &
Diversity practice. “As LGBT rights and the gender pay gap continue to
be in the headlines and topics of discussion among the general public,
employers can expect to face increased pressure to address these issues
in the workplace.”

In addition, the changing nature of work and the rise of the so-called
gig economy have given companies more hiring options than ever,
including independent contractors, contingent workers and an online
workforce. While this shift has created greater flexibility for workers
and increased efficiency for employers, it has also given rise to more
independent contractor misclassification lawsuits and regulatory
investigations. Despite the legal challenges, more than half of
respondents at large-cap organizations either said they were not
reluctant to hire more freelancers or contractors (24 percent) or
they were neutral on the matter (35 percent).

Employers Take Steps to Prevent Workplace
Violence

In response to tragic mass shootings across the nation, companies are
taking a range of actions to keep their employees safe, including
updating or implementing a zero-tolerance workplace policy (52 percent),
conducting pre-employment screenings (40 percent) and holding
training programs (38 percent). Only 11 percent of
respondents said they had not taken any action because violence is not a
concern for their company.

“Putting policies in place to increase awareness of workplace violence
and ensure that employees understand how to report threats in the
workplace are steps that all employers would be advised to take,” said
Terri Solomon, a Littler shareholder with extensive experience
counseling employers on workplace violence prevention. “Unfortunately,
even though workplace violence – and particularly active shooter
instances – are statistically rare, no employer is truly immune, so
taking preventative action can help save lives.”

Click
here for the Littler Mendelson 2016 Executive Employer Survey Report

About Littler

Littler is the largest global employment and labor law practice, with
more than 1,000 attorneys in over 70 offices worldwide. Littler
represents management in all aspects of employment and labor law and
serves as a single-source solution provider to the global employer
community. Consistently recognized in the industry as a leading and
innovative law practice, Littler has been litigating, mediating and
negotiating some of the most influential employment law cases and labor
contracts on record for over 70 years. Littler Global is the collective
trade name for an international legal practice, the practicing entities
of which are separate and distinct professional firms. For more
information visit: www.littler.com.

Contacts

Littler
Jen Klein
(213) 443-4245
jklein@littler.com