Artificial intelligence is the most significant source of workplace policy and regulatory concern for U.S. employers in 2026, surpassing other recent hot-button topics like immigration and diversity, equity and inclusion, law firm Littler Mendelson found in survey results published Wednesday.
The share of respondents expecting AI-related shifts approximately doubled from last year’s edition of the survey, in which fewer than half said they anticipated such developments. Additionally, 54% of respondents in this year’s edition of the survey said they were using AI in HR functions specifically, and only 6% said they were not using AI for any function whatsoever.
Perhaps as a result of the wider adoption, 68% of employers also said they had implemented formal AI governance policies — a stark difference from Littler’s 2025 report, in which 38% said they had such policies. Littler called this finding “encouraging” but noted that there is still room for more employers to adopt formal review or approval processes for AI tools as well as policies on which information restrictions apply to a given tool.
Additionally, fewer than half of organizations had instituted governance measures such as procedures for vetting third-party AI vendors, tool-specific training for AI applications or the designation of an internal AI oversight committee. The findings suggest that employers are “still playing catch-up” on AI governance, Niloy Ray, co-chair of Littler’s AI and technology practice group, said in the report.
“That mismatch could leave employers vulnerable to significant risk, especially given the complexity around compliance,” Ray continued.
Data privacy, bias and state laws top employers’ AI-related litigation fears
% of respondents to Littler sorted by response: “In which of the following areas is your organization concerned about AI-related litigation over the next 12 months? (Select all that apply)”
Littler’s survey queried more than 300 U.S. based C-suite executives, in-house lawyers and HR professionals.
The report examined several dimensions of AI’s impact on workplaces, including job displacement: while 15% of employers said they had either eliminated or were planning to eliminate head count due to AI, 63% said they had not and were unlikely to do so. However, respondents were more likely to report that they had either reduced hiring or reassessed job responsibilities in response to AI.
On AI-related litigation risk, the largest share of Littler respondents was concerned about data privacy — including employee and candidate data as well as videos and images evaluated by AI — with other common concerns including discrimination, state-specific regulations and recordkeeping and documentation requirements.
A growing number of states and localities have adopted AI-related legislation in recent years, especially laws restricting AI’s use in hiring. This approach has clashed with that of the Trump administration, which seeks a more industry-friendly AI agenda that includes proposed restrictions on the ability of states to regulate the technology.
Employers will need a combination of technical knowledge, business judgment and compliance focus to navigate AI as it further reorients work, said Marko Mrkonich, also co-chair of the Littler’s AI and technology practice group. The firm noted that large employers are further along in making AI-related changes to their workplaces but also said that its data appear to show that larger AI transformation is in its early stages.
“AI is opening new frontiers, redefining job responsibilities, changing the way we hire, and modifying staffing patterns,” Mrkonich said. “The old way of doing things is no longer good enough.”