If anything is keeping HR leaders up at night, it’s legal issues.
Considering some of the responses to Littler Mendelson’s 4th annual Executive Employer Survey, which provides insight into how the nation’s largest employers feel about a myriad of issues, it’s pretty clear why HR leaders worry.
Littler’s report reflects the views of more than 500 in-house counsel, HR leaders professionals and high-level executives from many of the largest companies in the United States. The survey was conducted in April and May 2015.
An overview of some key survey findings are below.
Department of Labor OT rules concern employers
Overtime reform was top-of-mind among employers, with 25% of respondents noting concern that the DOL would raise the minimum salary for professionally exempt employees above the $23,600 threshold – a concern that was realized in June when the DOL announced a new estimated level of $50,440 for 2016.
“Changing the threshold for overtime pay will severely alter management’s outlook on how it fills positions, as the drastic salary increase could squeeze out jobs due to payroll increases,” says Tammy McCutchen, a Littler principal who focuses on labor and wage-hour issues. “The overtime adjustment and other potential changes from the DOL could cost employers billions of dollars. The employer community should take action now to shape the final rule.”
The ACA remains a focus for employers
Before the Supreme Court’s landmark decision in late June in King v. Burwell, 55% of respondents said they had engaged or planned to engage with employee benefits attorneys or consultants to help navigate healthcare regulations relating to the Affordable Care Act. That was down slightly from 2014, when 58% gave that response.
“The rise of a ‘wait and see’ approach was an indication that employers continued to be uncertain about the fate of the ACA prior to the Supreme Court decision in King v. Burwell,” says Ilyse Schuman, co-chair, Workplace Policy Institute at Littler. “Overall, the results show that employers are becoming accustomed to the ACA stipulations. However, employers need to stay abreast of any changes that could impact the ACA as to remain compliant with the law.”
Increased attention on rights of LGBT employees
Prior to the recent Supreme Court ruling in Obergefell v. Hodges, many companies already had adjusted workplace policies. Forty-seven percent of respondents, in fact, said their companies had put in place policies that directly address issues faced by LGBT employees.
Even before the ruling in Obergefell, it was clear that many U.S. employers had been focusing on creating more inclusive workplaces for LGBT employees, notes Mark Phillis, a Littler shareholder. “Now that same sex marriage is legal nationwide, employers should revisit their benefits plans, leave policies, domestic partnership policies and non-discrimination policies to ensure they are treating all their employees equally,” he says.
Aggressive government policies: A new spin on whistleblowing
The SEC continues to encourage calling in tips through hefty rewards to those who blow the whistle on their companies. 22% of the survey’s respondents expressed concern that compliance programs will generally be less effective because compliance officers will take lapses straight to the government, rather than to executives, and another 22% noted compliance programs would be less effective because individuals will report to government agencies rather than fulfilling job duties.
There are a myriad of risks for employers should they ignore the fact that compliance officers can wield a big stick, explains Edward Ellis, co-chair, Whistleblowing and Corporate Ethics Practice Group at Littler.
“The SEC has made a clear effort to elicit more whistleblowers with proprietary knowledge of their companies’ compliance programs. It is up to employers to be proactive,” Ellis says.
An active EEOC and workplace discrimination claims
The current, active state of the EEOC has 57% of respondents expecting an increase in charges relating to hiring barriers, including the consideration of criminal or credit histories within the hiring process.
According to Barry Hartstein, co-chair, EEO & Diversity Practice Group at Littler, the survey results mirror concerns that the newly appointed EEOC Chair, Jenny Yang, and current General Counsel, David Lopez, recently approved for a new term, will focus on larger, systemic cases in the near term.
“Employers will continue to grapple with discrimination claims as the EEOC ramps up its enforcement efforts,” Hartstein says, adding that the concerns expressed in the survey align with what is happening in the courts, such as the Supreme Court’s decisions in UPS v. Young and EEOC v. Abercrombie, or newly minted ban the box legislation.
“In short, employers have many issues affecting their workforce related to discriminations and hiring practices,” he says.