Littler, the world’s largest employment and labor law practice
representing management, has released the results of its eighth annual
survey, completed by 1,331 in-house counsel, human resources
professionals and C-suite executives. Employers’ compliance challenges
swelled on multiple fronts over the past year, according to The
Littler® Annual Employer Survey, 2019, amid unexpectedly robust
enforcement of federal employment laws and a mounting patchwork of state
and local requirements. Employers are also keenly focused on preventing
harassment and pay inequality in the second year of the #MeToo movement
and on navigating the opportunities and challenges presented by emerging
technologies.
Employers Grapple with DOL and EEOC Enforcement, Patchwork of State
and Local Requirements
With changes under the Trump administration proving slow to materialize,
employers report feeling very little relief from federal regulation and
enforcement. The survey shows that employers’ perceived impact of
various regulatory issues on their workplaces remains relatively
unchanged from last year. Enforcement of federal employment laws by the
Department of Labor (DOL) is their leading concern, with 78 percent
of respondents anticipating a moderate or significant impact on their
workplaces over the next year (up slightly from 74 percent in the
2018 survey). In the 2017 and 2018 surveys, 77 percent said the
same of enforcement by the Equal Employment Opportunity Commission
(EEOC).
“Despite the lack of activity on regulatory matters over the past two
years, agencies are moving quickly to complete their regulatory agendas
before the 2020 election season,” said Michael Lotito, co-chair of
Littler’s Workplace Policy Institute. “2019 is a year of preparation as
the race is on to finalize rules that could have an enormous impact for
employers in the coming years.”
This includes the DOL’s new proposed rule to revise the “white collar”
overtime exemption regulations, which the majority of employers were
already preparing to comply with prior to the release of the proposal.
In addition to the 42 percent of respondents who instituted
changes prior to the injunction of the 2016 rule, 40 percent are
reviewing job descriptions to verify the classification of current
employees, and 36 percent are auditing compensation to identify
those employees likely to be impacted.
“It is encouraging that such a large percentage of employers are taking
steps to prepare for the rule changes before they are finalized,” said
Tammy McCutchen, Littler principal and former administrator of the DOL’s
Wage and Hour Division. “With the DOL targeting an effective date in the
first quarter of 2020, companies may not have much time to come into
compliance if the rule is not finalized until fall of 2019. Those that
wait for the final rule to make decisions on classification and salary
levels may be too late to comply by the effective date.”
Compounding the federal complexities, the proliferation of state and
local employment laws is creating persistent compliance challenges for
companies across a range of issues. Paid sick leave requirements top the
list with 69 percent of respondents indicating difficulty in
complying with a growing array of laws that are often conflicting in
nature, followed by legalization of marijuana (54 percent) and
background check stipulations (52 percent).
Commenting on the difficulty of navigating intersecting
marijuana-related laws, Littler shareholder Nancy Delogu notes:
“Companies that seek a compliance solution that can be applied across
their operations are stymied by the need to tailor policies and
practices to the varied statutes and legal rulings in each jurisdiction.”
Workplace Harassment and Pay Equity Remain Top of Mind
With the continued momentum of the #MeToo movement and calls for
workplace equality extending to include equal pay, sexual harassment and
gender pay equity are key areas of focus for companies.
Compared to last year’s survey, employers are taking greater action
across the board to curb sexual harassment in their workplaces. This
includes providing additional training to supervisors and/or employees (63
percent in the 2019 survey, up from 55 percent in 2018),
updating HR policies or handbooks (51 percent in 2019, up from 38
percent in 2018) and more proactively addressing complaints and
potential misconduct (37 percent in 2019, up from 29 percent in
2018).
“#MeToo has touched every industry imaginable; it impacts all types of
companies, large or small, high profile or even no profile,” said Helene
Wasserman, co-chair of Littler’s Litigation and Trials Practice Group.
“The survey data shows that most companies are taking this issue
seriously and are focused on providing training and updating policies
and procedures to ensure employees are treated fairly and feel safe in
the workplace.”
In addition, most employers are taking action to address gender pay
equity, with 48 percent auditing salary data and pay practices
and 24 percent revising hiring practices, including updating
applications and job descriptions or ceasing to ask candidates for prior
salaries. Still, more than a third (37 percent) report having
made no changes to address pay inequality, which may lead to legal and
reputational risks as more and more states contemplate pay equity
statutes and with rising public expectations of equality and fair pay
for all employees.
“Proactively addressing pay equity is not just important from a legal
liability standpoint. It is also vital to maintaining workplace morale
and to employee retention and recruitment,” said Denise Visconti, a
shareholder heading the Littler Pay Equity Assessment™. “While
legislatures across the nation continue to strengthen pay equity laws,
many in the C-suite already understand that demonstrating a commitment
to paying employees fairly is in their best interest and gives them a
competitive advantage.”
Respondents’ expectations of the EEOC’s enforcement priorities over the
next year reinforce the prominence of these issues. The top three areas
where an increase in workplace discrimination claims is expected are
harassment claims (61 percent), retaliation against employees who
file discrimination or harassment claims (49 percent) and equal
pay (47 percent).
AI and Data Analytics Bring New Opportunities, Challenges
The survey findings show that companies are starting to use robotics,
artificial intelligence (AI) and analytics to boost efficiency and
improve performance, but few are seizing on the full range of
opportunities presented by these emerging technologies, nor are they
sufficiently preparing for the impact on the workforce.
Screening résumés or applications was the most commonly cited use of AI
or analytical tools in recruiting and hiring, by 25 percent of
respondents. However, 63 percent are not currently using AI-based
tools in recruiting and hiring, suggesting that there is far more
potential for employers to leverage AI to support workforce management
decisions.
“HR is ripe for the implementation of AI-based tools, given that
companies have troves of existing data surrounding job postings,
applications, promotions and other decisions to train algorithms,” said
Aaron Crews, Littler’s Chief Data Analytics Officer. “While the use of
AI in recruiting and hiring is in its early stages, more and more
companies are realizing the significant benefits technology brings to
augment HR departments and support more informed decision making.”
Similarly, most employers are taking some steps to prepare for the
impact of robotics, AI and automation on the workplace and workforce.
The most common actions are identifying tasks that could be automated (37
percent) and hiring employees skilled in emerging technologies (22
percent). However, the 46 percent that have not taken any
action in this area indicates that there is work to be done. Truly
preparing for the sweeping changes ahead will require a deeper evolution
in the way companies approach talent planning and job training.
“Robotics and AI are redefining the 21st-century workplace, workforce
and work itself,” said Garry Mathiason, co-chair of Littler’s Robotics,
AI and Automation Practice Group. “While companies face unique
challenges in preparing for these changes and operating in a regulatory
landscape that has not kept pace with technological advancements, it is
critical that they take steps to address the disruptive effect of these
innovations on the future workforce and ensure their workers have the
skills and training to adapt.”
With rising efficiency demands and growing resource constraints, the
majority of general counsel and in-house attorneys responding to the
survey (64 percent) expect their legal service providers to offer
technology-driven tools and platforms. Commenting on the increased
pressure facing corporate law departments to manage costs and deliver
performance metrics, Scott Forman, founder of Littler CaseSmart® and
Littler onDemand, notes that such solutions can be designed to “address
their pain points and analyze data derived from their legal matters –
along with publicly available and industry-wide data – to identify
trends, manage risk and guide decision making.”
Click
here for The Littler® Annual Employer Survey 2019 Report
Click
here to view the survey infographic
The survey results are being released at Littler’s 36th annual Executive
Employer Conference, taking place May 8-10, 2019, in Phoenix. The
findings, which mainly reflect feedback from respondents based in the
U.S., align with the key legal and HR issues that emerged from Littler’s
first annual European survey. Released in November 2018, the survey
found that sexual harassment, gender pay equity and AI and data
analytics were also top of mind for the over 800 European employers that
completed the survey.
About Littler
With more than 1,500 labor and employment attorneys in offices around
the world, Littler provides workplace solutions that are local,
everywhere. Our diverse team and proprietary technology foster a culture
that celebrates original thinking, delivering groundbreaking innovation
that prepares employers for what’s happening today, and what’s likely to
happen tomorrow. For more information, visit www.littler.com.
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