Big Issues Face Employers in Arizona, Nationwide

There’s uncertainty amid potential regulatory change
by Neil M. Alexander

Employers are facing a great deal of uncertainty — from the new administration in Washington, to a growing patchwork of state and local laws, to continued advances in technology and shifts in how work is performed.

That was the major takeaway from The Littler® Annual Employer Survey, released this past May at Littler Mendelson’s annual Executive Employer Conference in Phoenix. The survey was completed by more than 1,200 in-house counsel, human resources professionals and C-suite executives, who expressed concerns that resonate with many employers in Phoenix and across Arizona.

The Trump Effect

Our sixth annual survey once again asked respondents to predict the impact of various regulatory issues on their workplaces over the next 12 months. In most instances, the perceived impact did not change much from last year, showing that employers do not expect near-term regulatory relief at the federal level. The exception was immigration reform, where 63 percent expect an impact over the next 12 months, up from 40 percent in 2016. This isn’t that surprising, given President Trump’s hardline stance on the issue.

Employers in Arizona understand the impact of immigration policy changes well. In the southern part of the state, farmers who rely on migrant labor are likely concerned — which is something even lawmakers with strong anti-immigration stances should remember. Additionally, Arizona tech employers in urban areas are no doubt wondering about the future of H1B visas — which were created to bring high-tech professionals from other countries to the U.S. — given the Trump administration’s vow to re-examine the program.

Changes to Paid Leave

Paid leave mandates were identified in our survey as the area in which recent laws have been enacted at the state and local levels that will most impact employers. This, of course, is a big issue in Arizona, with related aspects of the Fair Wages and Health Families Act in effect as of July 1. Editor’s Note: For more detail on the key changes impacting employers, please refer to an article in our June issue titled “Employer Alert: Paid Sick Leave Required.”

Contingent Workers

Our survey also found that employers plan to increasingly use independent contractors. While some states have taken an aggressive posture regarding the gig economy, potentially hampering employers’ plans to use contractors, Arizona has taken a diligent and thoughtful approach. That means the growth in the use of freelancers and independent contractors should largely continue in our state.

Odds are employers will continue to see a great deal of change in the coming months and years — particularly if the Affordable Care Act is eventually repealed and replaced and as the president fills seats in government agencies. But one thing is very clear: There’s already a lot to process for companies in Arizona and across the country.

 

Workplace Regulation

Percent each year reporting impact is
none /moderate / significant
2015 2016 2017
The Affordable Care Act 33 / 31 / 33 52 / 54 / 55 14 / 15/ 17
EEOC/anti-discrimination law enforcement 20 / 23 / 22 54 / 55 / 54 26 / 22 / 24
NLRB enforcement 17 / 15 / 13 42 / 41 / 42 41 / 44 / 45
Immigration  reform 9 / 5 / 24 33 / 34 / 39 58 / 60 / 57
DOL enforcement of federal employment law 18 / 31 / 25 62 / 51 / 56 21 / 18 / 19

 

Workforce Management

Which of the following accommodation requests from employees have you found most difficult to accommodate?
Intermittent FMLA leave taken in an unpredictable manner 65%
Extended leaves of absence beyond FMLA requirements 55%
Remote or work-from-home arrangements 37%
Modified or reduced work schedules 36%
Extended leaves of absence under the FMLA 24%
Religious practices or beliefs 6%
Extended jury duty (beyond a week) 4%

 

Which of the following factors have caused your company to use more independent contractors, freelancers and/or temporary workers?  
Contingent workers are primarily used to staff up and down for specific projects, contracts or seasonal hiring 35%
Difficulty finding qualified full-time candidates 30%
Efficiency of using contingent workers 22%
Higher costs associated with W-2 employees (e.g., benefits, wage & hour laws, etc.) 16%
Our business model is based on the use of contingent workers 10%
Increased use of these alternative work arrangements in our industry 8%
We are not hiring more contingent workers 34%

Source: The Littler® Annual Employer Survey, 2017

Neil M. Alexander is a shareholder in the Phoenix office of Littler Mendelson, the world’s largest labor and employment law firm representing management. He serves as co-chair of the firm’s Staffing, Independent Contractors and Contingent Workers practice, and regularly counsels clients on workforce design decisions and on maximizing contingent worker options while ensuring compliance with relevant laws. Alexander also defends companies in a range of industries against claims involving workplace issues.

Editor’s Note: For more detail on the key changes impacting employers, please refer “Employer Alert: Paid Sick Leave Required,” from the June 2017 issue of In Business Magazine.

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