HR Grapples with Aggressive Regulatory Enforcement

News Updates

More than half of all U.S. employers (56 percent) expressed concern with stepped-up rulemaking and enhanced federal agency enforcement, according to the 2014 Executive Employer Survey report from law firm Littler.

The annual survey, completed by more than 500 in-house counsel, HR professionals and C-suite executives, many from the nation’s largest companies, shows employers continue to feel the impact of a multitude of changing laws and regulations. Top concerns relating to employee compensation and benefits are noted below.

Minimum Wage and Overtime Rules

“With Congress deadlocked and the ongoing divisions in government, employers are feeling the impact of President Obama’s focus on the federal agencies to bring about changes to workplace policy,” said Michael Lotito, co-chair of Littler’s Workplace Policy Institute, in a news release announcing the survey results. “As employers grapple with more aggressive enforcement and workplace reforms from several federal agencies, the DOL’s pursuit of President Obama’s ‘income inequality’ agenda was a particular area of concern for employers—29 percent indicated concern with measures to raise the minimum wage and expand overtime pay, both of which will have a significant impact on employers’ bottom line.”

Health Care Reform

The Affordable Care Act (ACA) remained the regulatory issue that respondents expect to have the most impact on their workplace during the next 12 months. However, those that felt it would have a significant impact dropped 16 percentage points from 57 percent in the 2013 survey to 41 percent in 2014.

“It’s not to say that employers are no longer concerned about the ACA—they are and health care reform continues to be one of the most pressing issues on the minds of all employers,” said Steven Friedman, co-chair of Littler’s employee benefits practice, in the same release. “However, uncertainty surrounding the ACA, as well as delays in its implementation, has created confusion among employers. In response, 58 percent said they have engaged employee benefits attorneys or consultants to help track changing deadlines and upcoming compliance obligations.”

Similar to the 2013 survey, respondents identified a range of actions that they have taken or anticipate taking in response to the ACA’s implementation, albeit to a slightly lesser degree. The implementation of employee wellness programs remained the top action taken by roughly half of employers (52 percent). About a quarter of respondents said they would consider offering employees health care benefits through private health insurance exchanges (26 percent) or limit more employees to 30 hours per week (25 percent).

FMLA Management

A significant percentage of respondents (69 percent) indicated concern with employees abusing leave granted under the Family and Medical Leave Act (FMLA) and similar laws. “And for good reason,” states the report, which notes:

While the FMLA serves the laudable goal of providing job-protected leave for qualified medical and family reasons, the reality is that employees sometimes abuse this privilege and this presents not only headaches, but very real business challenges for many employers. The 2013 Employer Leave Management Survey, jointly sponsored by the Disability Management Employer Coalition and Spring Consulting Group, corroborates the concern expressed by respondents. The survey found that “managing intermittent leave” and “controlling employee abuse” ranked first and second, respectively, in a long list of biggest leave-related challenges for employers.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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