What Your Boss Is Worried About: You

Employers expect to be sued for discrimination, a new survey finds

Your company is bracing itself for lawsuits. Yours included.

U.S. employers are anticipating a rise in workplace discrimination claims based on their own hiring policies, a survey released last week shows. In the study (PDF), employment law firm Littler Mendelson asked 500 representatives of companies with both small and large market capitalizations about their deepest legal anxieties this year. Fifty-seven percent said they expected an increase in discrimination claims because of their interest in an applicant's criminal history—the companies' top concern when asked about the Equal Employment Opportunity Commission's enforcement efforts. 

A growing number of states have adopted laws that prevent employers from asking on job applications whether applicants have a criminal record. Thirty percent of the employers surveyed by Littler Mendelson said they had removed such questions from their applications. An additional 40 percent said they are hiring contractors to do background checks for them. The report suggested that this strategy may be risky because people are filing a growing number of lawsuits tied to third-party investigations of criminal history and seeking class action status. "This trend will not slow down soon," the report said. 

Still, this year's respondents were less likely than last year's to say that they expect an increase in over discrimination claims.

Littler Mendelson

The employers' second-biggest concern is potential claims over equal pay and the treatment of workers based on their sexuality, age, and disabilities. Employers seemed especially confused as to how to run employee wellness programs without getting into trouble for discriminating against disabled people.

The programs generally offer incentives to employees who hit health or fitness benchmarks and are encouraged by the Affordable Care Act. Recently, the Equal Employment Opportunity Commission sued several companies for programs that it charged were unfair to workers with disabilities. Overall, companies said they were having fewer problems with the new health-care law than in previous years; one-third said they were anxious about implementing Obamacare, down from 64 percent in 2012. 

The timing of the survey may have played a role in employers' concerns. The poll was conducted in April and May, when the Supreme Court hadn't yet ruled in favor of gay marriage. Forty-seven percent of companies said they already had rules protecting lesbian, gay, bisexual, and transgender workers, but 20 percent said they were either waiting on the court's decision to expand their regulations or had no policies in place.

Getting nailed by the National Labor Relations Board for the working conditions of subcontractors is a further concern. As federal and state authorities continue to scrutinize company decisions as to who counts as an employee, most employers surveyed said they had taken some action to mitigate potential legal challenges, such as auditing independent contractors. Thirty percent said they had made no changes to policies.

A growing share of C-suite executives and human resources professionals—17 percent—said they expected to "hire aggressively" this year. Compared with previous years, companies were also less likely to say they had unhappy employees staying in their jobs because there were no alternatives, or that people were stuck in jobs that didn't make good use of their skills.

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