Fears of labor crackdowns are running high, survey finds

wooden gavel

Eighty-two percent of employers expect to be affected by U.S. Department of Labor enforcement efforts over the next year, largely because of new overtime rules, and 74% anticipate more accusations of discrimination on the basis of gender identity and sexual orientation, according to a new survey.

In addition, the study found considerable fear of legal actions pivoting on the National Labor Relations Board’s reclassification of some franchisors as joint employers. Seven of 10 executives expect to face more labor complaints stemming from the actions of franchisees, subcontractors and staffing agencies.

Half the respondents said they expect the cost of franchising and similar partnerships to rise as a result of joint employer regulations, and that they will be more careful when pursuing those collaborative arrangements.

The canvass of 844 high-level corporate executives involved in personnel matters also revealed that the possibility of workplace violence has become a key concern for employers. More than half (52%) of the company officials surveyed on behalf of the labor law firm Littler Mendelson said they have instituted zero-tolerance policies on physical confrontations involving employees. Forty percent said they intend to weed out potentially violent customers in the screening process, and 38% said they address the risk in their training programs.

Littler Mendelson’s fifth annual Executive Employer Survey shows a sharp upswing in concern about running afoul of new labor-related regulations, sensibilities and indications from the federal government of more aggressive enforcement. For instance, only 31% of the employers who participated in last year’s survey said they had anticipated an increase in legal actions alleging discrimination against lesbian, gay, bisexual and transgender employees. This year, three of four say they expect increased activity on that front.

The law firm noted in analyzing the data that 31% of the respondents, drawn from an array of industries, expect DOL enforcement to have a profound impact on their businesses. A year ago, those fears were voiced by 18% of respondents.

The reason, according to Littler Mendelson, is the changeover of longstanding rules governing overtime pay for salaried employees. Yet the firm noted that its survey was conducted before the final regulations were released. The actual rules presumably heightened those concerns.

The canvass found that 65% of U.S. companies began assessing the new rules’ impact before they were issued, but that only 18% had acted on their analysis. Another 28% said they were waiting to see what would happen. 

“Given that the reclassification process takes roughly six months and the rule is unlikely to be blocked from going into effect on Dec. 1, 2016, employers should move quickly to ensure compliance,” the firm advised.

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