Lawsuits for Wages, Discrimination Top Employers' Worries

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By Genevieve Douglas

July 13 — Employers are worried about the potential for increased litigation from employees in 2016, whether because of changing overtime regulations, a lack of LGBT protections in the workplace or pay disparities among employees, according to Littler Mendelson's fifth annual Executive Employer Survey released July 12.

The vast majority of respondents to this year’s survey (82 percent) expect Department of Labor enforcement to have an impact on their workplace over the next 12 months, with 31 percent anticipating a significant impact (up from 18 percent in the 2015 survey), Littler found.

Employers are extremely concerned because that is a “huge bread basket” of regulations that will affect organizations across industries and could bring wage and hour cases to the forefront, Michael Lotito, co-chair of Littler Mendelson's Workplace Policy Institute, told Bloomberg BNA July 13.

“There are an enormous number of practical considerations that have to be taken into account in addition to the policy issues and this is not something that can be done overnight,” Lotito said.

Employers will need to make fundamental policy decisions on how to approach the overtime rule, and economic decisions as well, he said.

Employers also will need to figure out a communication strategy with employees affected by the changes and test run these changes made in payroll to ensure that mistakes are minimized, he said.

The overtime regulations increase the salary threshold below which workers are automatically eligible for overtime pay. The new cutoff is $47,476, effective Dec. 1. Although respondents completed the survey in the weeks before the release of the final rule, 65 percent had already conducted audits to identify affected employees, Littler said.

The survey is based on responses from 844 in-house counsel, human resources professionals and C-suite executives during April and May of 2016.

Potential EEO Discrimination Claims

The greatest year-over-year change in the survey results was in the area of Equal Employment Opportunity Commission enforcement, Littler said.

Specifically, Littler found there was a dramatic rise in the expectation of discrimination claims over the next year related to the rights of lesbian, gay, bisexual and transgender workers (31 percent in 2015 to 74 percent in 2016) and equal pay among employees (34 percent in 2015 to 61 percent in 2016).

“The EEOC has sent a clear signal that it will continue to prioritize rooting out discrimination based on sexual orientation and equal pay, so employers’ instincts that claims in this area will likely rise are right on the mark,” Barry Hartstein, co-chair of Littler’s EEO & Diversity practice, said in a press release. “As LGBT rights and the gender pay gap continue to be in the headlines and topics of discussion among the general public, employers can expect to face increased pressure to address these issues in the workplace.”

As these workplace issues become more known and are pushed out to the broader workforce, people who have experienced discrimination for decades now have a tool to address it through the EEOC, Sarah Warbelow, legal director for the Human Rights Campaign, told Bloomberg BNA July 13. “It’s not that there’s a rise in this kind of discrimination, but rather what we are seeing is people taking advantage of an opportunity to address the discrimination,” she said.

Given the changing legal landscape and decisions by federal courts, state laws and city laws, there’s no reason for employers to wait to adopt a nondiscrimination policy for sexual orientation and gender identity, Warbelow said.

HR must create “very clear” instructions for managers and employees about what discrimination looks like and how to address it, including giving employees real life examples of discrimination, such as refusing to use the changing names of transitioning individuals or commenting on employees’ sex practices, to make it clear in practice, she said.

What Will the Election Bring?

In light of the impending presidential election in November, survey respondents also addressed issues that they thought could be the focus of the parties.

The majority of respondents (75 percent) said income inequality—in terms of the overtime rules, state equal pay or minimum wage laws—would be a significant priority of the Democratic candidate, while only 4 percent felt income inequality would be a significant priority of the Republican candidate.

Respondents also expect the Democratic candidate to address union rights and immigration reform, while they believe the Republican candidate will likely address job creation, health-care reform and immigration reform as well, the survey found.

Diving more deeply into the expectations of the Republican platform, however, the majority of respondents (66 percent) stated they did not anticipate a complete repeal of the Affordable Care Act under a Republican administration.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bna.com

To contact the editor responsible for this story: Tony Harris in Washington at tharris@bna.com

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