Employers Brace for AI-Driven Workplace Shifts and Rising Risk, Littler’s Annual Survey Shows

(May 6, 2026) – U.S. employers are recalibrating workforce strategies as they adapt to surging artificial intelligence (AI) use and shifting priorities of the Trump administration. New research from Littler finds that while issues at the top of employers’ agendas over the past year – including immigration and diversity, equity and inclusion (DEI) – remain consequential, other areas such as AI and data privacy are moving to the forefront.

Littler, the world’s largest employment and labor law practice representing management, today released its 14th Annual Employer Survey. The survey draws on insights from more than 300 U.S.-based C-suite executives, in-house lawyers and human resources professionals to understand the most pressing workplace concerns in the current environment and how executives are navigating them.

AI Now the Leading Area Where Employers Expect Impacts from Policy Changes, Outpacing Immigration and DEI

Most respondents (84%) expect business impacts from policy or regulatory changes relating to AI use in the workplace over the next 12 months – double the share that said the same in 2025 (42%). Data privacy regulation rose in tandem, with 53% expecting workplace impacts over the next 12 months, up from 31% in 2025. By contrast, immigration fell to 49%, down from 75% in 2025, while DEI dropped to 38% from 84%.

“The shifts in this year’s survey relating to immigration and DEI do not mean that these issues have dissipated. Rather, businesses appear to be adjusting to a ‘new normal’ in the second year of the Trump administration and turning their attention to what’s coming next – particularly AI – as the workplace policy and regulatory landscape continues to evolve,” said James A. Paretti Jr., co-chair, and Shannon Meade, executive director, of Littler’s Workplace Policy Institute®.

On the immigration front, enforcement remains a significant concern among employers. Nearly three-quarters of respondents (73%) expect enforcement by the Department of Homeland Security and U.S. Immigration and Customs Enforcement to impact their workplaces over the next year. Reflecting these risks, many employers report taking steps over the past year to address workforce staffing impacts of immigration policy and enforcement changes. For instance, 54% of respondents have prepared for government audits, inspections or site visits, while 40% strengthened employment eligibility verification practices and 38% adjusted visa sponsorship strategies.

“The rapid pace of change in immigration policy over the past year has created significant challenges for businesses in managing day-to-day operations and staffing. In response, many employers are taking a range of actions to clarify plans and processes and to prepare for worksite enforcement activity,” said Jorge R. Lopez, chair of Littler’s Immigration and Global Mobility Practice Group. “But businesses crave predictability – and the fluid nature of the regulatory environment, along with continued lack of certainty about what the rules will be, makes advance planning increasingly difficult.”

Accelerating AI Adoption Prompts Shifts in Workforce Needs, Litigation Concerns

This year’s survey shows that as AI becomes more deeply embedded across workplace functions, employers are beginning to reevaluate their staffing needs. In light of expected efficiency gains, 37% of respondents say their organizations have reassessed, or are reassessing, job responsibilities, while 20% report reducing or planning to reduce hiring, and 15% say the same about workforce reductions.

At the same time, advances in AI governance remain uneven. More than two-thirds of respondents (68%) report having a formal policy governing AI use in the workplace, which is a substantial increase from Littler’s 2025 Employer Survey, when 38% had a specific policy and 13% had developed guidelines. However, only about half of respondents to this year’s survey report having a formal review or approval process for AI tools (55%) or restrictions on the information that can be entered into them (54%).

“AI adoption is moving quickly, but governance is still playing catch-up. That mismatch could leave employers vulnerable to significant risk, especially given the complexity around compliance. Between an increasingly active patchwork of state laws and unresolved liability questions in light of new federal policy proposals, employers will likely remain on the hook for how these tools are used,” said Niloy Ray, co-chair of Littler’s AI and Technology Practice Group. “AI policies should reflect how the tools are actually used by their workforces, and implementing meaningful training helps lessen the risk that AI integration will deepen litigation exposure.”

The survey also finds employers attuned to AI-related legal risk. Nearly 4 in 5 respondents (79%) express concern about AI-related litigation over the next 12 months, with data privacy (49%), discrimination or bias (45%) and compliance with state and local AI laws (43%) emerging as the leading areas of focus.

Employment Litigation and Workforce Accommodations Are Top of Mind

Employers expect litigation risk across a broad range of workplace issues in the coming year, with concern rising across several areas from Littler’s 2025 survey. One of the most notable increases is in workplace accommodation, where 67% of respondents expressed concern about employment-related litigation, up from 50% in the 2025 report.

At the same time, employers continue to grapple with pandemic-era expectations around flexible work, which are complicating efforts to increase in-office attendance. Hybrid work remains the dominant model for roles that can be performed remotely, with 77% of organizations offering some form of hybrid arrangement, while only 16% report fully on-site workforces.

As organizations adjust workplace expectations, they are also seeing a sustained rise in accommodation requests, particularly those tied to mental health. Over the past year, 67% of employers reported an increase in mental health-related leaves of absence and accommodation requests, continuing a multi-year trend.

“Many employers are seeing not only a high volume of leave and accommodation requests with a mental health component but continued increases on top of the elevated levels of the past few years,” said Jeff Nowak, co-chair of Littler’s Leave and Accommodation Practice Group. “Leaves and accommodations are among the most challenging workplace requests to administer, and the added complexity of mental health-related requests has only heightened the stakes.”

When it comes to managing leave and accommodation requests generally, nearly all respondents (97%) report facing challenges in at least one area. Managing extended or open-ended absences is the most significant hurdle, with 75% saying it was a challenge over the past year, while 70% cite ensuring managers are adequately trained to handle such requests.

View the Littler® Annual Employer Survey, 2026 Report

Additional Key Findings Include:

• Few Employers Closely Watching State Labor Law Reform: Despite the growing patchwork of labor-friendly legislation at the state and local levels, only 15% of employers are monitoring this activity to a large extent. See pages 8-9. 
• False Claims Act Enforcement Expands to New Areas: Unlawful DEI practices emerged as the top area of concern among employers as it relates to FCA and whistleblowing enforcement priorities of the Department of Justice, with 35% of all respondents and 53% from large organizations expressing concern. See pages 20-21. 
• Employee Departures Bring New Challenges: More than half of respondents that saw employees leave for competitors (55%) say some type of restrictive covenant or confidential information violation occurred. Among those employers, most took some sort of legal action to protect their business interests. See pages 27-29.

About Littler

With more than 1,800 labor and employment attorneys in offices around the world, Littler provides workplace solutions that are local, everywhere. Our global team and proprietary technology foster a culture that celebrates original thinking, delivering groundbreaking innovation that prepares employers for what’s happening today, and what’s likely to happen tomorrow.