May 23, 2024 Employers Expect Increased Regulatory Enforcement

The 12th Annual Employer Survey by Littler reveals how employer expectations and workplace policies are evolving in 2024.

In an election year that could significantly impact the future of employment and labor law, U.S. employers expect heightened regulatory enforcement as they navigate a host of workplace issues, including the disruptive impact of artificial intelligence (AI) and managing divisive political beliefs among employees.

That’s according to the 12th Annual Employer Survey released today by Littler, the world’s largest employment and labor law practice representing management. The survey draws on insights from more than 400 in-house lawyers, business executives and human resources professionals—36% of whom hold C-suite positions—to reveal how employer expectations and workplace policies are evolving in a consequential year for U.S. businesses.

More Regulatory Enforcement and Litigation, but Less New Legislation Anticipated in Election Year

With 2024 a major election year, U.S. employers appear to be expecting a slower pace of legislation across key areas of employment law. The major exception was for laws governing AI use in HR functions, where expectations of employment law-related changes jumped to 51% this year, from just 20% in the 2023 survey, as both state and federal lawmakers look to impose guardrails on the nascent technology.

At the same time, employers are bracing for increased enforcement by regulatory agencies and an uptick in employment-related litigation.

• 79% expect a moderate or significant impact from compliance and enforcement efforts by the U.S. Department of Labor over the next 12 months, compared to 65% who said the same earlier in the Biden administration, in 2022.
• 73% anticipate a moderate or significant impact from the National Labor Relations Board (NLRB) in the year ahead, compared with just 43% in 2022.
•  Litigation concerns are up across the board compared to last year’s survey, with employers concerned about litigation involving discrimination and harassment (63% in 2024, compared with 58% in 2023) and wage and hour issues (59% in 2024, compared with 54% in 2023), among several other areas.

“While all eyes will certainly be on the outcome of the presidential election, which will shape the direction of employment and labor policy for years to come, employers right now are feeling the impact of various activities and initiatives from regulatory agencies,” said Michael Lotito, co-chair of Littler’s Workplace Policy Institute. “The NLRB in particular has been pursuing an agenda to reshape U.S. labor law and overturn decades of well-established NLRB precedent, leading to significant changes affecting both unionized and non-union workplaces.”

The polarized political environment also brings challenges for employers when it comes to managing their workplaces. The vast majority of respondents (87%) say they are concerned about managing divisive political and social beliefs among employees leading up to the 2024 election.

Employers Split on Workplace AI Use Amid Legal Risks

As generative AI continues to attract both interest and scrutiny across the business world, employers are split in terms of their adoption of such tools for HR functions: 51% of respondents say their organizations do not use them, while 49% do in some form. For those that have leveraged generative AI in HR and talent acquisition, the most popular applications include the creation of HR-related materials (26%) and self-service chatbots for internal questions about policy or procedures (24%).

Even employers that deploy both predictive and generative AI tools in HR processes have reservations about the risks they present. Nearly three-quarters of respondents are moderately (41%) or very concerned (30%) about the challenges of complying with data protection and information security laws at the state, federal and/or international levels.

“Employers should be intentional about their generative AI usage, not only with regard to whether they use it at all, but also how, why and when,” said Niloy Ray, Littler shareholder and a core member of the firm’s AI and Technology Practice Group. “Policies governing the safe usage of AI can help protect against inadvertently running up against data privacy, discrimination and other potential vulnerabilities, along with the reputational issues that can stem from AI hallucinations.”

Despite predictions about AI’s transformative impact on the workforce, most respondents (88%) are only slightly or not at all concerned about corresponding job displacement, suggesting they see AI in its current form as a tool to supplement—rather than replace— human work.

Employers Still Recalibrating Workplace Policies After Pandemic-Era Upheaval

With new policies often lagging one to two years behind major shifts in workplace dynamics, employers continue to grapple with the lasting cultural changes spurred by the pandemic. For instance, 74% of respondents report an increase in employee requests for leaves of absence or accommodations for mental health-related issues over the last year. However, just 22% say they have changed their related accommodation or leave policies.

“Though the pandemic may be in the rear-view mirror for most purposes, many employers are still seeing its lasting effects in the form of vastly increased accommodation requests, particularly related to mental health,” said Littler shareholder Devjani Mishra. “Additionally, the survey finds half of employers continuing to see requests for hybrid or flexible work that are not tied to any legally protected reason, reflecting a fundamental shift in how remote work has become an expectation for many employees.”

Additionally, while 71% of respondents say their organizations operate under some form of a hybrid work schedule (the same proportion as last year’s survey), there was a notable shift toward more days spent working in person than remotely. Specifically, 39% now have hybrid schedules with employees working more days in person than remotely, compared to 31% in 2023.

With employers focused on bringing employees back into the office—even if it is for only part of the week—75% say they are tracking in-office attendance, with the largest share (51%) tracking badge swipes when an employee enters the building.

The full survey report explores these and other timely issues impacting the workplace in greater depth, including the impact of efforts to restrict non-compete agreements, addressing pay equity issues, and uncertainty surrounding corporate diversity initiatives.

Download the Littler® Annual Employer Survey, 2024

About Littler
With more than 1,800 labor and employment attorneys in offices around the world, Littler provides workplace solutions that are local, everywhere. Our diverse global 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.

© 2024 Littler Mendelson P.C.
Littler Mendelson is part of the international legal practice Littler Global which operates worldwide through a number of separate legal entities. Attorney Advertising.

Subscribe to Industry Today