Survey: AI Anxiety Tops Employer Concerns

U.S. employers are shifting their regulatory worries toward artificial intelligence and data privacy according to law firm Littler Mendelson’s annual employer survey.

Littler’s 14th Annual Employer Survey shows AI concerns increasing even as immigration enforcement and workplace accommodation demands continue to strain HR departments.

Conducted in March, they survey of more than 300 C-suite executives, in-house lawyers, and HR professionals, found that 84% of respondents expect AI-related policy or regulatory changes to affect their business over the next year.

That’s double the share who said the same in 2025, when diversity, equity and inclusion topped the list of concerns.

Data privacy concerns rose alongside AI, with 53% of employers anticipating workplace impacts, up from 31% a year earlier.

Immigration, DEI Concerns

By contrast, worry about immigration policy fell sharply, with 49% of employers expecting business impacts this year compared with 75% in 2025.

DEI-related concern dropped even more steeply, to 38% from 84%.

Littler researchers said the declines likely reflect employers adapting to the current enforcement environment rather than the issues fading in importance.

Seventy-three percent of respondents still expect immigration enforcement by the Department of Homeland Security and Immigration and Customs Enforcement to impact workplaces this year.

The survey also found employers are taking a range of proactive steps to address the staffing impacts of immigration policy and enforcement changes, including clarifying processes and preparing for worksite enforcement activity.

Reshaping Staffing Decisions

AI’s expanding footprint is already reshaping staffing decisions. More than a third of employers (37%) say they have reassessed, or are reassessing, job responsibilities because of AI-driven efficiency gains.

About 20% have reduced hiring or are in the process of doing so, and 15% report workforce reductions tied to AI adoption.

Large employers are moving faster: 29% have already reassessed job responsibilities, and 17% have cut both hiring and headcount.

Formal AI governance has improved substantially—68% of organizations now have a policy governing workplace AI use, up from 38% a year ago.

But the survey found notable gaps beneath that headline number. Only about 55% of employers have a formal review or approval process for AI tools, and just 54% restrict what information employees can enter into them.

Fewer than half have designated AI oversight committees, vendor due-diligence procedures, or tool-specific employee training, and only a quarter offer risk-based AI training on legal or ethical considerations.

Those gaps help explain why 79% of employers are concerned about AI-related litigation in the coming year.

Data privacy tied to employee or candidate information leads the list of worries (49%), followed by discrimination or bias claims (45%) and compliance with the growing patchwork of state AI laws (43%).

Accommodation Requests, Return-to-Office Friction

Employment litigation concerns rose in 10 of 13 areas surveyed, reversing last year’s trend of declining worry.

The sharpest jump came in workplace accommodations, where concern climbed 17 percentage points to 67%, driven partly by tension between employees’ pandemic-era expectations for flexibility and employers’ push to bring workers back on site.

Hybrid arrangements remain the norm: 77% of organizations offer some form of hybrid schedule for roles that could be performed remotely, while just 16% require full-time on-site work and 6% remain fully remote.

Among employers with fixed hybrid schedules, nearly half now require three in-office days per week, with fewer organizations than in past years allowing only one or two.

Mental health-related leave and accommodation requests continue to climb, with 67% of employers reporting an increase over the past year—consistent with similar findings in Littler’s 2024 and 2025 surveys.

Employers cited managing extended or open-ended leaves (75%) and ensuring managers are properly trained to handle requests (70%) as their biggest administrative challenges.

Employee Departures, Enforcement Risk

The survey also found that 92% of employers had employees depart to competitors in the past year, and more than half of those cases involved some violation of restrictive covenants or misuse of confidential information.

In response, 95% of affected employers took action, most commonly a cease-and-desist letter, and 35% pursued litigation.

Unlawful DEI practices ranked as employers’ top concern related to U.S. Department of Justice activity.

On enforcement, unlawful DEI practices ranked as employers’ top concern related to U.S. Department of Justice activity (35%), followed by cybersecurity violations (28%).

False Claims Act recoveries hit $6.8 billion in fiscal 2025—roughly double the prior year—much of it driven by whistleblower-initiated suits, a trend Littler says is expanding employer exposure beyond traditional government-contracting sectors.

Taken together, the findings suggest employers are settling into a “new normal” around immigration and DEI enforcement while turning fresh attention—and resources—toward managing the legal and operational risks of a rapidly AI-integrated workplace.