Retail/hospitality employers most concerned about immigration policy changes
Immigration enforcement remains a significant concern among employers — particularly those in the retail and hospitality industries.
The majority (70%) of employers in the retail/hospitality industries expect to be impacted by immigration policy changes over the next year, according to an annual survey from Litter, the world’s largest employment law firm. That compares to 49% of all respondents in the survey.
Employers in the retail and hospitality industries have also taken more steps than employers in other industries to address workforce staffing impacts of immigration policy and enforcement over the past year, revealed Litter’s 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, with the largest percentage of respondents (14%) in the retail and hospitality industries.
More than half of all employers (54%) and 69% of large employers have prepared for government audits, inspections or site visits over the past year, the leading answer choice by a substantial margin. For employers in the retail and hospitality industries, the percentage taking action in this area rose to 78%. This comes as recent immigration site visits (audits/raids) illustrate the scale of potential workforce disruption.
Roughly half of large employers say they conducted immigration compliance training (54%) and adjusted visa sponsorship strategies (48%). Among those in the hospitality/retail industries, 70% say their organizations have conducted immigration compliance training, compared with 49% of all respondents.
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.
“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," said Jorge R. Lopez, chair of Littler’s Immigration and Global Mobility Practice Group. "In response, many employers are taking a range of actions to clarify plans and processes and to prepare for worksite enforcement activity."
AI
Among all respondents, most (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.
In light of expected efficiency gains from AI, 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,” said Niloy Ray, co-chair of Littler’s AI and Technology Practice Group. “That mismatch could leave employers vulnerable to significant risk, especially given the complexity around compliance. “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.”
Other key takeaways from the survey are below.
•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.
•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.
•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.
•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