Littler Survey Reveals Impact of Healthcare Reform

SAN FRANCISCO (July 9, 2013) – Littler Mendelson, P.C. (Littler), the world’s largest employment and labor law firm representing management, has released the results of its 2013 Executive Employer Survey. The annual survey, completed by more than 400 in-house counsel, human resources professionals and C-suite executives, many from the nation’s largest employers, analyzed how employers are being impacted by current economic conditions and regulatory changes during President Barack Obama’s second term.

Employers Remain Bullish on Hiring amid Lingering Challenges due to Current Economic Conditions

On the heels of highly optimistic hiring plans expressed in the inaugural survey one year ago, employers remain bullish in their intentions to bring on new full-time employees, with 60 percent of respondents saying they plan to hire more workers, either cautiously or aggressively, in the next 12 months. In addition, similar to last year’s survey, 70 percent of respondents said they expect the Obama administration to continue to assign a high priority to job creation.

The barriers facing workers due to current economic conditions that were identified in the 2012 survey remained; however this year saw a decline in the key areas respondents feel are impacting the workforce:

♦ Underemployment (from 67 percent in 2012 to 44 percent in 2013)

♦ Remaining in a job due to an inability to find employment elsewhere (from 85 percent in 2012 to 79 percent in 2013)

♦ Demands for employees to do more with less (from 91 percent to 85 percent)

“As the economy continues to recover, our findings suggest that employers are eager to expand their workforce and are starting to see a decline in the impact of some of the key obstacles facing workers,” said Thomas Bender, co-managing director of Littler. “Just as workforce reductions heightened the focus on risks of wrongful terminations in recent years, improvements in the job market have shifted the dialogue to legal landmines in the hiring process. From proper background checks and social media screening to avoiding unemployment, age and other types of discrimination claims, employers are focused on avoiding missteps in hiring that could lead to litigation or other charges.”

Government Regulations Continue to Influence the Workplace

Following the myriad of legislative and regulatory issues that respondents identified as impacting the workplace in the 2012 survey as the presidential election was approaching, employers have continued to feel the influence of various government regulations during Obama’s second term.

The vast majority of respondents expect the president to continue to assign a high priority to healthcare reform (86 percent) and immigration reform (82 percent), while still prioritizing other key regulatory issues impacting the workplace. The National Labor Relations Board (NLRB) and union organizing matters, workplace discrimination matters and whistleblowing and retaliation claims were all cited as having some level of priority in the administration.

“With implementation of the Affordable Care Act top of mind for employers and many predicting that 2013 could be the year for comprehensive immigration reform, employers are closely watching how legislation in these and other areas will impact their operations,” said Jeremy Roth, co-managing director of Littler. “At the same time, government agencies continue to be aggressive in advancing changes to workplace policy, with a continued focus on enforcement, and states have advanced their own employment laws, tasking employers with navigating an increasingly complex web of regulations at the federal, state and local levels.”

Healthcare Reform

Similar to the 2012 survey, respondents chose healthcare reform as the regulatory issue expected to have the most impact on the workplace over the next 12 months, with 57 percent indicating that it will have a significant impact and 37 percent indicating a moderate impact. Respondents also expected U.S. Department of Labor regulations under the Affordable Care Act (ACA) to be the most pressing priority of the current nominee for secretary of labor, Thomas Perez (61 percent).

In reflecting on actions their companies have taken or anticipate taking in response to the ACA’s implementation, only 6 percent of respondents noted discontinuing healthcare benefits for full-time employees and paying the penalty under the ACA’s “pay or play” mandate. However, the findings suggest that they are exploring various avenues to adjust to the new regulatory environment, including:

♦ Implementing employee wellness programs, which was the top action identified by more than half of respondents (54 percent).

♦ Offering employee healthcare benefits through private health insurance exchanges (31 percent).

♦ Limiting more employees to less than 30 hours per week (27 percent).

♦ Reducing hiring of new full-time employees (20 percent).

The findings provide further insight on the impact of the ACA on employers following a recent Gallup survey of more than 600 small businesses, released at Littler’s 2013 Executive Employer Conference, in which 55 percent of respondents indicated the ACA will increase costs and 41 percent said they have held off on hiring new employees as a result of the legislation.

Immigration Reform

The 82 percent of respondents that cited immigration reform as a high priority of the Obama administration represents a significant increase from the 33 percent who chose immigration as a high priority in 2012.

Among the immigration reform proposals currently being discussed, respondents chose improving employment verification systems and increasing visas allotted to highly skilled foreign workers as having the most potential to positively impact their organizations.

When asked about difficulties in filling open positions, a relatively high percentage of respondents (13 percent) cited a lack of U.S. citizens graduating with an applicable degree or highly specialized skills as a challenge in finding the right applicant for a position. With the annual cap for H-1B visas for 2014 reached in less than a week, triggering a lottery that left some American employers without the ability to fill needed positions, the results reflect the potential for immigration reform to increase access to highly skilled workers.

Various Workplace Issues Stay at Forefront for Employers

The 2013 survey explores additional issues impacting the workplace including:

Whistleblowing

A significant percentage of respondents (66 percent) indicated taking proactive steps over the past year to encourage employees to report potential misconduct or fraud internally before they report to regulators as a whistleblower, including improving anonymous reporting procedures (58 percent), training managers to properly respond to complaints and avoid retaliatory conduct (53 percent), educating employees on the company’s whistleblower policy (52 percent), and improving internal whistleblower programs (51 percent).

Workplace Violence

Following high-profile incidents of gun violence and disputes in the workplace, employers appear to be taking action over the past year to improve safety.

51 percent of respondents indicated that their companies have made improvements to building security or security procedures during the past year.

A considerable number of respondents also noted that their companies have updated or implemented “anti-violence” policies (33 percent), conducted training on identifying potentially dangerous employees (24 percent) and enhanced pre-employment screening checks (22 percent).

Social Media

The survey results demonstrated that proactive social media policies are popular among corporations.

The majority of respondents indicated that their companies implemented policies or rules regarding employee social media use during work hours (64 percent), on employer-issued devices (58 percent), and on discussing the company through social media channels (52 percent).

Similar to the 2012 survey, only 1 percent of respondents indicated requesting social media logins as part of the hiring or onboarding process, despite the fact that states continue to advance laws to regulate social media password requests from employers.

A detailed survey report is available here.

About Littler Mendelson

Littler Mendelson is the world’s largest labor and employment law firm exclusively devoted to representing management.  With over 980 attorneys and 57 offices throughout the U.S. and globally, Littler has extensive resources to address the needs of U.S.-based and multi-national clients from navigating domestic and international employment laws and labor relations issues to applying corporate policies worldwide. Established in 1942, the firm has litigated, mediated and negotiated some of the most influential employment law cases and labor contracts on record.