LITTLER MENDELSON EXECUTIVE EMPLOYER SURVEY REPORT JULY … · The 2015 Executive Employer Survey Report revealed that as employers negotiate changing regulations and economic conditions,

LITTLER MENDELSON EXECUTIVE EMPLOYER SURVEY REPORTJULY 2015

LITTLER MENDELSON EXECUTIVE EMPLOYER SURVEY REPORT

1

JULY 2015

Disclaimer: survey questions and resulting findings do not represent any specific political affiliation

or preferences of littler, nor do they constitute any legal, economic or political advice.

ExEcutivE Summary

The 2015 Executive Employer Survey Report revealed that as employers negotiate changing regulations and

economic conditions, they are most concerned with some of the moves regulatory agencies are making that

may affect how they can hire, compensate and maintain relations with their workers. These concerns have

been amplified as employers worry less about macroeconomic impacts on their businesses, as the economy

continues to improve and as we grow further away from 2009’s economic low points. There are a number of

agency actions and regulatory review processes that respondents feel could impact their businesses.

Specifically:

• More than half of the respondents (57 percent) said they expected to see an increase in the

number of workplace discrimination claims during the next year that relate to employers’ own

hiring barriers, including the consideration of criminal or credit history in the hiring process. Of the

other Equal Employment Opportunity Commission (EEOC) enforcement initiatives that concerned

respondents, claims made over equal pay (34 percent) and accommodation for disabled workers

(37 percent) were next in line.

• Possible changes to the definition of “joint employer” ranked high as a concern for employers.

Most respondents (69 percent) were concerned about exposure to greater legal liability if the

National Labor Relations Board (NLRB) broadens the definition, which would make companies

liable for the working conditions and labor violations associated with hired subcontractors. Also,

59 percent of respondents were concerned about the difficulties of monitoring the employment

practices of separate entities.

This report summarizes and analyzes the results of Littler Mendelson’s fourth annual Executive Employer Survey. It examines what impacts the workplace most through the eyes of in-house counsel, human resources professionals and C-suite executives from companies of all industries. The results explore top-of-mind issues, including overtime pay reform, workplace inclusion, healthcare and increased enforcement efforts from government agencies.


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JULY 2015

• On June 30, 2015, President Obama and Secretary of Labor Perez released a Notice of Proposed

Rulemaking (NPRM), seeking public comments on proposed changes to the “white collar” overtime

exemption regulations. The notable revisions include an increase to the minimum salary required

for exemption (raised to an estimated $50,440 annually by the time a final rule is issued in 2016),

an increase to the total annual compensation requirement needed to exempt highly compensated

employees (HCEs) (raised to $122,148 annually) and a goal to establish a mechanism for automatically

updating the salary levels annually. The proposal did not specifically address duties tests, but sought

comment on possible changes to the tests.

• The uncertainty of these changes caused concerns over added costs associated with possibly

changing government regulations governing exemptions. In response, more than one third (37 percent) said they were concerned with the potential elimination of the executive, administrative

and professional exemptions for workers who spend more than 50 percent of their work time

engaged in non-exempt duties and 29 percent noted concern with the elimination of the executive

exemption for supervisors who perform some non-exempt duties, such as stocking shelves and

working the cash register.

Other issues concerning government regulation have ebbed in importance for respondents during the last

three years, particularly in the realm of healthcare. Concerns in this area have diminished since 2012, when the

Affordable Care Act (ACA) was newer and employers were less sure of how it would affect their benefit plans

and other operations.

Specifically:

• Three years ago, a robust 64 percent of our respondents said they were significantly concerned

about regulatory issues surrounding healthcare affecting their business, compared with only 33 percent in 2015.

• Employers were watching challenges to the ACA, including King v. Burwell, a case that challenged the

legality of subsidies on federal insurance exchanges. The case could have unraveled health insurance

for millions of people who obtained coverage through federal exchanges. However, the Supreme Court

upheld the ACA in a 6-3 decision issued on June 25 2015. Before the opinion’s release, 21 percent of

respondents said their major issue in implementing healthcare wellness programs was the uncertainty

surrounding ACA.

http://www.scotusblog.com/case-files/cases/king-v-burwell/


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JULY 2015

• Maneuvering within the regulations of the ACA and other healthcare laws continues to be a point of

concern for respondents, as 55 percent hired employee benefits attorneys or consultants to help

navigate and track compliance.

After reaching 10 percent in late 2009, the national unemployment rate began a long, steady drop to its

current level of 5.3 percent. This same transition can be seen in the survey’s responses over the last four years.

The effects of an improving job market have clearly influenced respondents’ answers to questions concerning

hiring, advancement and job placement.

Specifically:

• Positive sentiment for aggressively hiring new employees was shared by 17 percent of respondents,

matching 2012’s high, and a marked increase over last year’s 12 percent.

• Fewer employers are feeling they need to approach hiring with caution, a healthy sign for the overall

employment ecosystem. This was the third consecutive year of declining numbers in this part of our

survey. The numbers: 39 percent of 2015 respondents said they would cautiously hire new full-time

employees, compared with 41 percent in 2014, 47 percent in 2013, and 54 percent in 2012.

• Another sign that the job market may be approaching a healthy equilibrium is that only 31 percent of

respondents had concerns about workers being underemployed due to a dearth of higher-level jobs.

That’s compared with higher numbers in each of the three previous surveys conducted: 67 percent in

2012 and 44 percent in 2013 and 2014.

• Upbeat hiring sentiment also manifested as respondents exhibiting a sharp decrease in concerns over

unhappy workers staying at jobs because of the inability to find work elsewhere. Only 43 percent had

these concerns in 2015, compared with 66 percent in 2014, 79 percent in 2013 and 85 percent in 2012.

Social issues continue to affect the workplace, demanding that employers cope with changing laws and

evolving values within society. Some of these issues involve new laws, such as those surrounding marriage.

Also of note is an increased focus on bullying issues within the workplace.

Specifically:

• Respondents showed that their companies have adapted well to the rights of LGBT employees as

protected by law. Forty-seven percent said their companies had instituted no new changes to germane


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JULY 2015

policies in the space during 2015 because they already had policies that expressly addressed issues

faced by LGBT employees. Only 6 percent of respondents said they were waiting on the Supreme Court

decision on same-sex marriage before making additional changes. On June 26, 2015, the Supreme Court

handed down its 5-4 decision in Obergefell v. Hodges, making same-sex marriage legal throughout the

United States.

• Half (50 percent) of respondents said their companies had introduced language in a company policy or

code that set an expectation of a hospitable workplace free of bullying. And 37 percent of respondents

said they had communicated to employees that bullying is not acceptable.

http://www.scotusblog.com/case-files/cases/obergefell-v-hodges/


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JULY 2015

rEGuLatiON

Question:

How much impact do you expect the following regulatory issues to have on your workplace over the next 12 months?

Significant impactModerate impactNo impact

2015

2014

2013

*DOL enforcement of fe

deral

employment la

ws

Immigratio

n reform

Rules protectin

g whistleblowers

from retaliatio

n

NLRB enforcement

Enforcement of EEOC/

anti-disc

riminatio

n laws

Healthcare reform

2012

* This answer choice was not provided prior to the 2015 survey.

2%

33%

64%

64%

21%

14%

45%

41%

13%

58%

17%

24%

53%

22%

25%

6%

37%

57%

19%

61%

21%

37%

41%

22%

40%

50%

9%

32%

47%

20%

12%

47%

41%

23%

62%

15%

42%

37%

21%

56%

40%

4%

53%

39%

9%

21%

62%

18%33%

52%

14%26%

54%

20%

41%

42%

17%

56%

37%

7%

58%

33%

9%


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JULY 2015

As we put more time between the 2008 economic meltdown and today, employers are gaining confidence

on how to best negotiate new whistleblowing rules. This is evidenced by a relative decline in respondents

who expect rules protecting whistleblowers to make a significant impact in the next 12 months. In 2012,

17 percent of respondents expected this, followed by 9 percent in 2013, 4 percent in 2014 and a slight bump

to 7 percent in 2015—the last year perhaps affected by some large rewards that the government has recently

bestowed on whistleblowers.

Concerns over compliance with EEOC and discrimination laws have remained relatively steady during the

four years of the survey, with a low of 15 percent of respondents expecting them to make a significant

impact in 2014. That rose to 20 percent in 2015, close to the 21 percent registered in 2012 and 2013.

The combination of a crashing economy and a long, delayed recovery has activated regulators on several

fronts during the last several years. Also playing a role was the widely held perception that middle-class

jobs were being squeezed out of the economy; politicians holding this viewpoint have helped put upward

pressure on minimum wages and, more important for our respondents, have led the Department of

Labor (DOL) to more aggressively scrutinize possible transgressors of employment laws. As the economy

continues to recover, employers have grown less concerned with enforcement actions from the NLRB

in this space. In 2015, only 17 percent of respondents said NLRB enforcement was a significant concern,

compared with 41 percent in 2012.


7

JULY 2015

Question:

The Department of Labor is likely to modify the regulations interpreting the white-collar exemptions to the Fair Labor Standards Act in the following ways. Please indicate which possible revision would cause your organization the most concern in terms of increasing potential overtime costs. (Select one.)

Revising th

e outside sa

les exemptio

n to require

that se

llers

spend more than 50% of ti

me engaged away from th

eir

employer's place or p

laces of b

usiness

Eliminatin

g the executive

, administrative

and professional

exemptions fo

r those workers w

ho spend more th

an 50%

of their w

ork time engaged in non-exempt d

uties

Eliminatin

g the executive

exemption for w

orking supervis

ors

who engage in some non-exempt d

uties d

uring th

e course

of their d

ay, such as w

orking a cash register, s

tocking

shelves, o

r answ

ering custo

mer questio

ns

Raising th

e minimum sa

lary basis

for executive,

administrative

and professionally

exempt employees

from $23,600 to

over $40,000 per ye

ar

25%

7%

29%

37%


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JULY 2015

Respondents expressed concern with regard to three potential changes in the DOL’s proposal to revise white-

collar overtime exemption regulations and make more workers eligible for overtime pay. The DOL addressed

the minimum salary required for exemption, the total compensation requirement needed to exempt HCEs and

the goal to establish a mechanism for automatically updating the salary levels annually. The Department is not

proposing specific changes to the duties tests at this time but did request comments on duties testing and the

aforementioned changes.

Of greatest concern to respondents were possible changes to the duties requirements for overtime exemptions.

Thirty-seven percent of respondents indicated that the potential elimination of the executive, administrative

and professional exemptions for workers who spend more than 50 percent of their work time engaged in

non-exempt duties was their primary concern. This was closely followed by the elimination of the executive

exemption for supervisors who perform some non-exempt duties (29 percent), such as stocking shelves and

working the cash register.

The government’s primary goal is to increase the number of employees eligible for overtime pay. Through

this proposal the DOL is estimating an impact up to 5 million workers. This comes at a cost to employers with

the NPRM stating that the proposed increases to the salary levels will result in the transfer of income from

employers to employees of between $1.1 and $1.2 billion per year. Interestingly, when surveyed, respondents

highlighted this salary hike as a part of their overtime rules worry: 25 percent of respondents indicate that their

primary concern with regard to increased costs stem from a rise in the minimum salary level.


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JULY 2015

Not applicable because my c

ompany:

does not engage in fra

nchising; does n

ot

have a supply c

hain; is not p

art of a dealer

network; and does not u

se contractors f

or

staffing, se

curity, ja

nitoria

l servie

s, etc.

Difficulty

of monito

ring th

e employment

practices of se

parate entities

Exposure to greater le

gal liabilit

y

Increased costs

Question:

If the National Labor Relations Board rules to broaden the definition of a “joint employer” (making companies potentially liable for working conditions and labor violations of their subcontractors, staffing agencies or franchisees), which of the following would be a concern of your organization? (Check all that apply.)

34%

14%

69%

59%


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JULY 2015

The potential implications of an expanded definition of “joint employer” continues to be top of mind as

the NLRB deliberates on its final ruling. Generally, businesses were considered to be joint employers only

when they shared direct and immediate control over the essential terms and conditions of employment,

including hiring, firing, discipline, supervision and direction. Only those entities involved with an

employee’s day-to-day working conditions, and, therefore, in a position to alter those conditions, were

thought to be responsible for National Labor Relations Act violations.

NLRB General Counsel Richard Griffin is advocating for a significantly looser definition and a more

“traditional” concept of a “joint employer,” leaving employers concerned with the potential sweeping

impact of this decision. Fifty-nine percent of respondents expressed unease when assessing the difficulty

of monitoring separate entities, and 34 percent felt increased costs would be a primary concern as well.

Overall, employers noted a high level of concern with this issue. Well over half of the respondents felt

exposure to greater legal liability (69 percent) would be of concern with a broadened definition.


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JULY 2015

Question:

In response to the challenges to the Affordable Care Act and uncertainty surrounding its implementation, which of the following actions has your organization taken or do you plan to take? (Check all that apply.)

None, we are sta

ying the course

Take a "wait and se

e" approach

Delay planning in so

me areas in th

e event

that furth

er concessions a

re granted

Engage employee benefits atto

rneys or

consultants t

o help navigate upcoming

regulations a

nd track areas w

here

there are likely t

o be changes

20152014

58%

39%

13% 14%

55%

33%

9%

18%


12

JULY 2015

The ACA continues to be a focus for employers. There was little change—58 percent in 2014 to 55 percent in 2015—in the responses regarding companies that have engaged with attorneys or consultants

to navigate the new healthcare regulations. A slightly smaller percentage of respondents, 33 percent versus 2014’s 39 percent, said their companies were staying the course on such matters, while a rising

percentage of respondents, from 14 percent to 18 percent, said they had adopted a “wait and see”

approach.

This outlook is likely influenced by King v. Burwell, a case challenging the legality of subsidies on federal

insurance exchanges. The Supreme Court preserved the ACA in June 2015. The 6-3 ruling was a victory for

President Obama’s administration, saving his signature domestic policy from fundamental disruption.

For employers already in compliance, the decision won’t have much of an effect. However, employers who

were waiting on this outcome to take action must turn their focus back on their policies, as the decision will

likely slow momentum for future wholesale changes to the ACA.


13

JULY 2015

Question:

Which of the following issues are of concern to your organization in implementing or administering an employee wellness program? (Check all that apply.)

The potential fo

r lawsuits

from employees w

ho claim

discrim

ination or w

rongful discharge due to

informatio

n

uncovered through the wellness

program

Lack of guidance or negative

guidance from th

e EEOC

on what constitutes a

"voluntary" program and

how not to ru

n afoul of equal employment la

ws

Maintaining privacy o

f employee data

Legal uncertainty o

ver how to

administer p

lans (i.e., w

hether

employees can be incentivi

zed to partic

ipate, whether

spouses can partic

ipate, etc.)

None of the above

Uncertainty o

ver the future of th

e Affordable Care Act

39%

25%24%

41%

21%

28%


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JULY 2015

The unknown outcome of King v. Burwell case in part helps explain why 21 percent of respondents said their

major healthcare concern when administering wellness plans was uncertainty over the future of the ACA.

There still exists a great deal of confusion on the law and how it affects the operation of company

wellness plans. Illustrating this, 41 percent of respondents expressed concern about lack of guidance or

negative guidance from the EEOC on what constitutes a “voluntary program” and how not to run afoul of

equal employment laws.

Some wellness programs that offer large incentives to participating employees for hitting particular health

benchmarks have come under fire from the EEOC for, in its view, violating the Americans with Disabilities

Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). A Senate bill was introduced

earlier this year to define exactly what would be permissible under law, but it has yet to pass. Amid this

uncertainty, 39 percent of respondents had concerns over how to administer plans and how employees

can be legally incentivized to participate.

Wellness programs raise major concerns for many respondents in the realm of data privacy: 24 percent expressed this as a major concern, and 25 percent were concerned about potential legal action from employees

claiming discrimination or wrongful discharge due to information uncovered through the wellness program.


15

JULY 2015

None of the above

Compliance programs generally

will be less

effective

because individuals i

n those departm

ents

will report t

o government agencies ra

ther than

focusing on fulfil

ling their o

wn job responsibilit

ies

Executives w

ill be hesita

nt to come to

the compliance

department fo

r fear in

formatio

n will be reporte

d to

the government

Compliance officers w

ill leverage th

eir

insider knowledge to

secure bountie

s

Question:

Given that the Securities and Exchange Commission (SEC) has issued two whistleblowing awards to compliance officers and has publicly encouraged such individuals to report misconduct to the government, which of the following are of concern to your organization with regard to compliance officers blowing the whistle? (Check all that apply.)

This question was only posed to respondents with mid cap and large cap organizations.

16%

30%

22% 22%


16

JULY 2015

As the SEC continues to pursue a variety of avenues to increase the quality and quantity of tips from

whistleblowers, respondents expressed a fair amount of concern with the agency’s focus on urging

compliance officers to report misconduct to the government. SEC officials have publicly encouraged

compliance professionals to report potential wrongdoing. In August 2014, Sean McKessy, chief of the

SEC’s Office of the Whistleblower, stated that these individuals are “often are privy to the very kinds of

specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one.”

Nearly a quarter of respondents (22 percent) indicated that such a focus will likely deter executives

from expressing concerns to the compliance department for fear that information could be reported

to the government. The same percentage (22 percent) expressed concern that it will undermine the

effectiveness of the compliance department if individuals are focused on reporting to government

agencies to collect bounties rather than fulfilling their job responsibilities.

Compliance officers are expected to be the eyes and ears of their companies, focused on identifying

misconduct or fraud while ensuring high ethical standards and compliance with applicable laws and

regulations. The nature of their responsibilities is that they often come with close knowledge of the

inner workings of a company, and 16 percent of respondents expressed concern that the SEC’s focus

on compliance officers as whistleblowers would incentivize these individuals to leverage their access to

sensitive information to secure bounties.

The inherent clash between the compliance officer’s role (to protect companies from compliance lapses)

and the increasing incentives to report misconduct to receive significant monetary awards should cause

more alarm and create more urgency among employers to review their existing compliance programs.

When finalized, the Occupational Safety and Health Administration’s (OSHA) Best Practices for Protecting Whistleblowers and Preventing and Addressing Retaliation will provide employers guidance on how

to encourage whistleblowers to report within the company first. We expect that this guidance will be

forthcoming in fall 2015.

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542799812


17

JULY 2015

Hiring barrie

rs, including consid

eration of

criminal or credit h

istory i

n the hirin

g process

Retaliation against e

mployees who

have filed disc

riminatio

n claims

Accommodations fo

r pregnant w

orkers

Accommodations fo

r disa

bled workers

Accommodations to

avoid religious disc

riminatio

n

Rights of LGBT w

orkers

Age discrim

ination claim

s

Equal pay claims

Discrim

ination ste

mming from wellness

programs

Broad based syste

mic investigatio

ns

and related litigatio

n

EEOC challenges to se

ttlement a

greements

and arbitratio

n programs

Question:

Of the following areas where the Equal Employment Opportunity Commission is focusing its enforcement efforts, which do you feel are likely to see a rise in workplace discrimination claims over the next year? (Check all that apply.)

57%

33%30%

37%

20%

31% 32% 34%

17%

28% 27%


18

JULY 2015

Interestingly, the number of completed systemic investigations by the EEOC fell from 300 in 2013 to 260

in 2014. But companies still harbor great concern about discrimination claims and the focus of EEOC

enforcement efforts. Survey respondents worried most about claims over the accommodation of disabled

workers (37 percent) and claims regarding equal-pay issues (34 percent).

Last December, David Lopez was reapproved as EEOC general counsel and Charlotte Burrows was

approved as commissioner, giving Democrats a 3-2 majority on the Commission. In the future, consistent

with the EEOC’s Strategic Enforcement Plan issued in December 2012, the EEOC plans to continue

to focus on systemic cases—many of which fall into areas of high concern for respondents, such as

accommodations for the disabled and the consideration of criminal or credit histories in the hiring process.

In Littler’s Annual Report on EEOC Developments (Fiscal Year 2014), the firm highlighted a series of

issues plaguing employers when it comes to EEOC enforcement, many of which were expressed as

concerns by the respondents, as well as areas where employers can feel a bit of relief. For instance,

along with the EEOC’s decrease in completed investigations, the Commission recovered only $13 million

in monetary relief through settlements in 2014 versus $40 million in 2013. This decrease came despite an

overall uptick in the number of settlements: 78, versus 63 in 2013.

Even so, some of the highest settlements we’ve seen have occurred recently for both employers and unions.

In April 2015, Patterson-UTI, a drilling company facing charges of race and national-origin bias, agreed to

pay a $14.5 million settlement, and the Sheet Metal Union agreed to pay $12 million in a race-bias lawsuit,

demonstrating vulnerability in the construction industry.

Fifty-seven percent of respondents felt that there would be a rise in discrimination claims related to hiring

barriers in 2015, including consideration of criminal or credit history in the hiring process, which could largely

be tied to the rise in ban-the-box legislation at the state and local level.

Beside the aforementioned concerns, respondents felt increases would come from claims regarding

retaliation (33 percent), age discrimination (32 percent) and the rights of LGBT workers (31 percent).

Employers are also watching cases around the U.S. that consider accommodations in the workplace

relating to religion. A full 20 percent of respondents expected an increase in claims related to

accommodations to avoid religious discrimination. Further, based on the Supreme Court’s decision in

EEOC v. Abercrombie, issued on June 1, 2015, employers can expect an increased sensitivity to religious-

accommodation issues by applicants and employees.

http://www.scotusblog.com/case-files/cases/equal-employment-opportunity-commission-v-abercrombie-fitch-stores-inc/


19

JULY 2015

The backdrop for all of these survey findings include the recent Supreme Court ruling in Mach Mining v. EEOC,

which addressed the EEOC’s approach to conciliation in resolution of discrimination charges following a

reasonable cause finding. The EEOC has been given far greater latitude in its approach to conciliation by the

courts, which means there is potential for increased settlement demands by the EEOC in the conciliation

process. Also, on May 27, 2015, the DOL issued new guidance on how contracting agencies should evaluate

labor violations when hiring federal contractors, and potential reasonable cause findings and/or litigation by

the EEOC may create significant risks to federal contractors.

Experts expect an increase in reasonable cause determinations in 2015, which goes hand-in-hand with the

concern surrounding systemic investigations. Reasonable cause findings typically come with less than 5

percent of charges investigated by the EEOC, but last year alone they were issued in 45 percent of systemic

investigations, versus 35 percent in 2013.

http://www.scotusblog.com/case-files/cases/mach-mining-v-equal-employment-opportunity-commission/


20

JULY 2015

None of the above

An increase in lawsuits or claim

s

from dise

nchanted employees

Employees are being asked

to do more with less

Unhappy workers a

re remaining in current

jobs due to

an inability to

find

employment else

where

Workers are underemployed due to

an

inability to

secure higher-le

vel jobs

20132012 2014 2015

JObS aNd thE EcONOmy

Question:

In which of the following areas do you feel current economic conditions are continuing to affect the workforce? (Check all that apply)

67%

85%91%

36%44%

79%85%

23%

44%

66%

84%

48%

77%

35%31%

43%

1% 1% 2% 4%


21

JULY 2015

Employers saw a significant drop in unhappy workers remaining in current jobs due to the inability to

find other work (from 85 percent in 2012 to 79 percent in 2013 to 66 percent in 2014 to 43 percent in

2015), which not only signals a stronger economy, but is a point for employers to continue to monitor: as

employees continue to have more options, employers will likely have to work harder to recruit and retain

top talent. Furthermore, there was a decrease in the number of respondents who reported an increase in

lawsuits or claims from disenchanted employees (from 48 percent in 2014 to 35 percent in 2015). In yet

another sign of economic turnaround, employers also saw a decrease in employees being asked to do

more with less (from 91 percent in 2012 to 77 percent in 2015).


22

JULY 2015

Lay off f

ull-tim

e employees

Outsource job functio

ns to th

ird-party

companies or consulta

nts

Increase the use of contin

gent workers,

such as

independent contractors a

nd freelancers

Agressively h

ire new full-t

ime employees

Cautiously

hire new full-t

ime employees

20132012 2014 2015

Make no change to curre

nt workforce

54%

17%

2%

39%

47%

13%

2%

17%

41%

12%

4% 4%3%6%

8% 7% 8%10% 10% 9%

13%

22%26% 25%

Question:

In the next 12 months, does your company plan to:


23

JULY 2015

For the first time since 2012, an increased number of respondents indicated that they were planning to

aggressively hire new full-time employees (from 13 percent in 2013 to 12 percent in 2014 to 17 percent in

2015), which is likely a sign of a strengthening economy. There was also a minor decline in respondents

looking to make no changes to the current workforce (from 26 percent in 2014 to 25 percent in 2015).

As was the case last year, a majority of respondents are still planning on hiring, either cautiously or

aggressively, over the next year (from 53 percent in 2014 to 56 percent in 2015).


24

JULY 2015

No, but we intend to

do so in th

e next year

No, because my company a

lready h

ad policies that

expressly a

ddress iss

ues faced by L

GBT employees

Yes, but w

e are awaiting th

e outcome of the Supreme Court

decision on sa

me-sex m

arriage before making additio

nal changes

Yes, we have made changes to

our policies e

ven though

we were not require

d to by la

w

Yes, we have made changes in

response to changes in

the law

WOrkfOrcE maNaGEmENt

Question:

With increased attention on the rights of LGBT employees, has your company instituted changes to make your workplace more inclusive? (Select one.)

15%13%

11%

47%

6%


25

JULY 2015

LGBT rights have received a great deal of attention in the courts in the past couple years, with high-profile

Supreme Court cases including 2013’s United States v. Windsor, the decision that overturned part of the

Defense of Marriage Act (DOMA), and this year’s Obergefell v. Hodges, in which the court addressed the

constitutionality of same-sex marriage bans in the U.S. Though the Supreme Court ruling made same-sex

marriage legal, it seems employers have already taken steps to make their workplaces more inclusive.

Nearly 50 percent of the respondents indicated they had not instituted changes to make their workplaces

more inclusive because their companies already had inclusive policies in place. This response is consistent with

recent surveys showing that 89 percent of Fortune 500 companies prohibit discrimination based on sexual

orientation and 66 percent prohibit discrimination based on gender identity or expression.

Fifteen percent of respondents also indicated they had made changes, but not because they were required

by law. A majority of respondents had some LGBT-inclusive policies already in place (47 percent), had made

recent changes (26 percent), or were looking to make changes to their policies in the near future (13 percent).

With same-sex marriage legalized, employers will want to review their policies and benefits plans to make

sure they are treating all married couples equally and are using gender-neutral language. They should pay

close attention to leave policies, health benefit plans, retirement plans and other benefits offered to spouses of

employees. If they have not already done so, employers may want to consider revising their non-discrimination

policies to include sexual orientation and gender identity or expression. Employers may also want to revisit

prior practices involving benefits for domestic partnerships. Now that all couples can marry, unless such

coverage is required by law, some employers may choose to eliminate domestic partner coverage, with its

inherent tax and payroll difficulties.

http://www.scotusblog.com/case-files/cases/windsor-v-united-states-2/


26

JULY 2015

None of the above

Introduced language in a company p

olicy or code th

at

sets a

n expectation th

at employees treat each other

with respect a

nd dignity

Provided tra

ining to su

pervisors o

n managing instances

of bullyi

ng

Looked into signs a

nd instances o

f bullyi

ng behavior

Communicated to employees th

at bullyi

ng is not a

cceptable

Introduced a company p

olicy that se

ts a ze

ro-tolerance

standard for w

orkplace bullying

22%20%

37%

28%

50%

23%

Question:

Has your organization taken any of the following actions to combat bullying in the workplace? (Check all that apply.)


27

JULY 2015

Workplace bullying remained top of mind for many HR departments. A full 50 percent of survey

respondents reported that their companies had introduced language on the issue within their corporate

literature. Almost as many respondents (37 percent) said that they actively communicated with employees

on the subject, reinforcing that workplace bullying is unacceptable. Of the companies surveyed, 28 percent provided training to supervisors on how to manage instances of bullying.

Workplace bullying has been an active issue for not only HR professionals but also lawmakers. California,

for instance, passed a law in January 2015 requiring businesses to supply an employee-training curriculum

focused on “the prevention of abusive conduct.”

Introducing a zero-tolerance policy in the workplace can be more challenging than simply setting expectations

and putting an emphasis on respect and dignity in employee relationships. But a fifth (20 percent) of the

respondents said their companies had introduced zero-tolerance policies. A similar number (22 percent) reported having investigated instances of bullying behavior.

Work remains in this area across all sectors of the job economy, however. Anti-bullying campaigns haven’t

taken off within all companies: 23 percent of respondents said that none of the aforementioned measures

had been taken at their businesses. Many of these companies could be costing themselves, as the

downsides of bullying in the workplace—lower employee morale and productivity—are well documented.


28

JULY 2015

Implementin

g internal social m

edia platform

s and to

ols

Addressing wearable technology in

the workplace

(i.e., h

ealth tra

ckers for w

ellness programs, w

earables

that record audio or vi

deo, etc.)

Leveraging "Big Data" to inform

decision-m

aking

without ru

nning afoul of priva

cy and se

curity laws

Risks a

ssociated with

increased reliance on cloud servic

es

Employees looking to

use more of their p

ersonal devic

es

for busin

ess purposes

16%

2%

9%

51%

Question:

Which of the following technological developments has been the most challenging to manage in your workplace? (Select one.)

18%


29

JULY 2015

The most significant concern, by nearly a three-to-one margin, related to employees’ use of their

personal devices for work. In fact, half (51 percent) of those surveyed responded that this was their

biggest challenge in managing workplace technology. This result is not surprising given the numerous

compliance challenges that “bring-your-own-device” (BYOD) programs raise. These include, for example,

protecting confidential business information and sensitive personal information, accessing personal

devices when conducting internal investigations, extending litigation holds to information stored on

personal devices, addressing expense reimbursement issues and avoiding potential liability for off-the-

clock work.

On the other end of the spectrum, only 2 percent of respondents expressed concerns about the use of

wearable technology in the workplace. This low response rate likely reflects the fact that while wearables

are increasingly popular with consumers, they are just now beginning to enter the workplace. We expect

concerns over managing wearable technology to increase as the technology becomes more prevalent in

the workplace.

Implementing internal social media communications tools and the risks associated with increased reliance

on cloud services were effectively tied for second, concerning 18 percent and 16 percent of respondents,

respectively. Both types of technologies can raise significant legal compliance challenges—potential

violations of the National Labor Relations Act for the former, for instance, and compliance with non-U.S.

data-protection laws for the latter. These risks, however, tend to be more focused than those raised by

BYOD programs, likely explaining the significant gap in perception of risk between the top finisher and

those in the second tier.


30

JULY 2015

Decided to reclassi

fy individ

uals that could legitim

ately be tre

ated

as independent contra

ctors or o

vertime exempt in

order

to avoid potential la

wsuits or expensiv

e penalties

Engaged counsel to tra

ck changes in federal and sta

te laws

aimed at m

isclassi

fication

Started usin

g online tools t

o ensure compliance with

applicable laws

Conducted audits of in

dependent contractor re

lationships

or to asse

ss exempt classi

fications

None of the above

I do not know

Question:

What measures is your company taking to ensure compliance with applicable laws when engaging independent contractors or classifying employees as exempt from overtime pay? (Check all that apply.)

37%

16%

7%

20%

30%

11%


31

JULY 2015

In the last several years, federal and state governments have given extra scrutiny to companies that

employ independent contractors. Using independent contractors saves companies thousands in payroll

and unemployment taxes—but if the classification is made in error, it can bring fines and penalties for

those companies.

Making compliance even more difficult is the fact that the DOL is looking to limit who can be classified as an

overtime exempt employee, raising the current pay floor from $23,360. Some employee advocacy groups

called on the DOL to raise the floor to $69,000, a condition that would have entitled 10.4 million additional

salaried workers in the United States to overtime pay, however in its recently released proposal, the DOL

raised the minimum salary to an estimated $50,440 by 2016, which will impact up to 5 million workers and

cost employers billions.

Many respondents (37 percent) said their companies had conducted audits of contractor relationships

and of employees who were classified as exempt. A fifth (20 percent) of respondents said their

companies had taken action, and reclassified workers who may have been close to the line. Only 16 percent of respondents said they had engaged with counsel to stay on top of changes in federal and

state regulations, and only 7 percent had enlisted the help of online tools in the matter.

Despite increased attention from the government regarding compliance around the classification of

independent contractors and overtime exempt employees, 30 percent of survey respondents said their

companies had taken none of the available measures mentioned in this survey to mitigate compliance

issues in this space.


32

JULY 2015

We have expanded our screening program to

increase background

checks on individ

uals other th

an employees, such as c

ontingent

workers and independent contra

ctors

We have increased our use of b

ackground checks due to

technology advances th

at streamline th

e process and th

e

valuable informatio

n provided

We have scaled back our u

se of background checks d

ue to ris

k of

litigatio

n and difficulty

in complying with

regulations a

nd

guidance from th

e federal agencies

We have faced lawsuits over th

e past year re

lated to

background checks in th

e hiring and employm

ent process

None of the above

We have scaled back th

e degree to which we conduct b

ackground

checks on individ

uals other th

an employees, such as c

ontingent

workers and independent contra

ctors

We have removed criminal convic

tion questio

ns from all e

mployment

applications d

ue to guidance fro

m the EEOC and th

e growing

patchwork of ban-th

e-box laws

We have engaged background screening companies to

help

conduct background checks

Question:

In which of the following areas has your company been impacted by the changing landscape for criminal and credit checks of job applicants and/or employees? (Check all that apply.)

5%

30%

8% 7%

41%

6%

1%

28%


33

JULY 2015

Despite recent pro-employer developments such as the U.S. Court of Appeals decision in EEOC v. Freeman, nearly a third (30 percent) of respondents have removed criminal conviction questions from

all employment applications. This signifies a growing understanding among the employer community

that reliance on criminal history records in the hiring or employment process continues to present risk,

especially as ban-the-box legislation proliferates across the country and large lawsuits filed by the EEOC

continue to be vigorously litigated.

Simultaneously, employers continue to use background-screening companies to assist with background

checks: 41 percent of respondents said they had engaged with a third-party screener as a result of

the changing landscape, even though class action litigation cases under the Fair Credit Reporting

Act (FCRA) related to gathering criminal history through third parties have surged recently. At least

29 putative class actions claiming statutory damages under FCRA were filed in the first four months

of 2015 alone. This trend will not slow down soon, and may be significantly affected by the Supreme

Court’s decision in Spokeo v. Robins, where the question of whether a person may sue under a statute

and possibly bring a class action even if he or she has not suffered any injury will be answered.

http://www.scotusblog.com/case-files/cases/spokeo-inc-v-robins/


34

JULY 2015

Challenges in investig

ating and resolvin

g

employment-re

lated complaints in foreign jurisd

ictions

Challenges and concerns w

ith mandates to

prevent

bribery,

fraud and related iss

ues under th

e Foreign

Corrupt P

ractices Act a

nd similar la

ws

Complying with

differin

g, and sometim

es conflic

ting,

data privacy la

ws in va

rious c

ountries

Hiring and fir

ing employees with

out violatin

g foreign laws

Finding the proper b

alance between local hires a

nd U.S.

expatriates, a

nd establishing appropria

te reporting lin

es

Keeping employees safe while working overse

as

Avoiding potential claim

s of d

iscrim

ination or h

arassment

by U.S. expatria

tes sent to

work overseas

Managing relations w

ith unions a

nd works councils

Drafting and im

plementing appropria

te international

assignment p

olicies and agreements

Complying with

immigratio

n, tax, c

ompensation and

benefits regulatio

ns

Not applicable; m

y organiza

tion does n

ot operate abroad

Question:

Which of the following areas are of concern to your organization in expanding into new global markets or managing employees working abroad? (Check all that apply.)

10%

23%

13%

55%

10% 12%

5%

23% 21%16% 17%


35

JULY 2015

As the Web and new trade agreements make it easier to seek out new revenues abroad, more and more

companies are looking to supplement their domestic and organic growth with pushes outside the United

States. Almost half of respondents, 45 percent, worked for companies with operations abroad.

Working outside the country means adhering to different laws, regulations and customs concerning

immigration, taxes, compensation and benefits. These kinds of subjects remained fair concerns for the

respondents with overseas operations (23 percent). Data privacy laws, too, are often different overseas,

especially in the EU, which has led the global discussion on the matter. Operating within the limits of

foreign data-privacy laws was also of concern to 23 percent of respondents.

Staying within the bounds of foreign laws when laying off workers concerned 21 percent of respondents,

with a similar number, 16 percent, of them also concerned about the challenges in investigating and

resolving employment-related complaints overseas. Just as high on the list for respondents was a subject

that often makes the news: challenges and concerns relating to bribery and fraud abroad. Seventeen percent of respondents cited concerns with issues related to the Foreign Corrupt Practices Act and

similar laws.


36

JULY 2015

mEthOdOLOGy aNd dEmOGraphicS

In April and May 2015, Littler distributed the Executive Employer Survey via email to in-house counsel, human

resources and C-suite executives primarily throughout the United States and from a wide variety of industries.

The results were tabulated, analyzed and released in July 2015.

Number of respondents:

• 503

Respondents included:

• C-suite executives (5 percent)

• In-house attorneys/corporate counsel (41 percent)

• Human resources professionals (48 percent)

• Other professionals (6 percent)

Companies represented were of a variety of sizes:

• Large cap, greater than $4 billion in market capitalization (23 percent)

• Mid cap, $1 billion to $4 billion in market capitalization (21 percent)

• Small cap, less than $1 billion in market capitalization (56 percent)

Documents

LITTLER MENDELSON EXECUTIVE EMPLOYER SURVEY REPORT JULY … · The 2015 Executive Employer Survey Report revealed that as employers negotiate changing regulations and economic conditions,