Labor & Employment Law Daily Wrap Up, SURVEYS—AI and regulatory complexity reshape employer priorities, Littler finds, (May 8, 2026)

By Patricia K. Ruiz, J.D.

The survey depicts a workplace environment defined by rapid technological change, evolving regulatory expectations, and sustained litigation risk.

U.S. employers are prioritizing artificial intelligence, data privacy, and litigation preparedness as they navigate an evolving workplace regulatory environment, according to Littler’s 2026 Annual Employer Survey. The report highlights a marked shift away from immigration and diversity-related concerns and toward technology-driven risks and governance gaps. It also underscores growing attention to workforce accommodations, enforcement pressures, and employee mobility challenges across industries.

Trends in top concerns. Littler’s survey of more than 300 U.S.-based executives, in-house counsel, and HR professionals finds that 84 percent of respondents expect workplace impacts from AI-related regulatory or policy changes in the next 12 months, making it the top area of concern. This represents a significant increase from 2025, when diversity, equity, and inclusion (DEI) issues ranked first. Data privacy concerns have also risen, with 53 percent anticipating regulatory impacts, reflecting increased compliance exposure tied to expanding AI use. By contrast, expectations of workplace impacts linked to immigration and DEI policies declined sharply year over year, to 49 percent and 38 percent, respectively. The report notes that employers may be adjusting to the current enforcement landscape, even as immigration enforcement remains a significant concern, with 73 percent anticipating impacts from Department of Homeland Security and Immigration and Customs Enforcement activity.

AI issues. The survey documents rapid AI adoption across business functions alongside uneven governance practices. While 68 percent of respondents report having formal policies governing AI use, fewer organizations have implemented operational controls such as approval processes for AI tools (55 percent) or restrictions on input data (54 percent). This gap persists even as 79 percent of employers express concern about AI-related litigation, particularly in areas such as data privacy (49 percent), discrimination or bias (45 percent), and compliance with state and local AI laws (43 percent).

AI integration is also prompting workforce changes. Thirty-seven percent of respondents say they have reassessed or are reassessing job responsibilities due to AI, while 20 percent report reducing or planning to reduce hiring, and 15 percent indicate workforce reductions. These developments suggest early-stage shifts in staffing strategies tied to anticipated efficiency gains.

Employment litigation. Beyond technology, employers report heightened concern about employment litigation across a range of issues. Workplace accommodation claims saw a notable increase, with 67 percent of respondents expressing concern, up from 50 percent in the previous year. Employers also cite rising risks related to wage and hour practices (57 percent), retaliation (56 percent), and wrongful termination or reductions in force (56 percent).

The report links growing accommodation concerns to continued demand for flexibility and increases in mental health-related leave requests. Sixty-seven percent of employers report increased mental health-related leaves of absence and accommodation requests over the past year. At the same time, hybrid work remains the dominant model, with 77 percent of organizations offering some form of hybrid arrangement.

Compliance and enforcement. Regulatory enforcement at both federal and state levels continues to shape employer strategy. More than 80 percent of respondents expect state and local regulatory activity to affect their workplaces, while federal agencies such as the EEOC, Department of Labor, and immigration authorities are also seen as key sources of compliance pressure. However, relatively few employers report closely monitoring state-level labor law developments, despite the proliferation of new state and local requirements.

The survey also highlights immigration compliance as an ongoing operational focus. More than half of employers report preparing for audits or worksite inspections, and many have implemented training or expanded legal support. These steps reflect continued concern about enforcement activity and workforce disruptions tied to immigration policy.

In the area of whistleblower and False Claims Act enforcement, respondents identify unlawful DEI practices (35 percent) and cybersecurity violations (28 percent) as leading concerns. At the same time, a significant portion of employers report limited concern about such enforcement, particularly those without federal funding exposure.

Employee mobility, trade secrets. Finally, the report underscores persistent risks related to employee mobility and trade secrets. Ninety-two percent of employers report employee departures to competitors in the past year, and 55 percent of those cases involve alleged violations of restrictive covenants or misuse of confidential information. Employers responded with legal or disciplinary actions in 95 percent of such cases, including litigation in more than one-third.

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