SAN FRANCISCO — Retail employers are preparing for significant challenges in 2025, as new regulatory changes surrounding diversity, equity, and inclusion (DEI) policies, immigration enforcement, and litigation risks dominate concerns. According to Littler’s 13th annual Employer Survey, 84% of employers, including those in the retail sector, expect the shifting landscape of DEI regulations under the Trump administration to majorly impact their businesses.
View The Littler Annual Employer Survey, 2025 Report
The report highlights several key issues affecting retailers, who are particularly vulnerable due to their large, diverse workforce and public-facing roles. Among the most pressing concerns, 75% of employers, including many retailers, expressed worry about how changes to immigration policies will affect staffing, particularly in frontline and logistics roles, where immigrant workers are prevalent.
“With the expected uptick in worksite enforcement, it is important for employers to proactively conduct reviews to check that I-9 forms are up to date, that they know where they’re located, and that there is a crisis management team in place in the event of a site visit from ICE or another government agency,” said Jorge R. Lopez, Littler shareholder and chair of the firm’s Immigration and Global Mobility Practice Group.
Litigation risks surge over DEI policies
Retailers are also grappling with an uptick in litigation risk related to DEI practices. The Littler survey found that nearly half of all employers (45%) are concerned about lawsuits tied to their DEI efforts, a sharp increase from just 24% last year. Retailers, especially those with visible DEI programs, face heightened scrutiny under the current administration’s policies, raising concerns about the long-term sustainability of such initiatives.
Despite these challenges, the survey also shows that 45% of employers are not considering significant rollbacks of their DEI programs, which signals a continued commitment to diversity efforts despite political headwinds.
“With DEI programs facing existential threats and unprecedented scrutiny from federal agencies, we’re seeing many employers wisely step back and analyze their … practices with an eye toward compliance and effectiveness,” said Jeanine Conley Daves, a shareholder at Littler.
Increasing accommodation requests and remote work demands
Retailers are also contending with increased employee accommodation requests. The survey reveals that 70% of employers, including those in retail, have seen a rise in requests related to mental health conditions, with many employees seeking additional support for anxiety, depression, and related issues.
Furthermore, as more companies increase in-office work requirements, 56% of retail employers who have done so report a surge in requests for remote work accommodations. With remote work policies still evolving, companies must carefully navigate potential legal risks in denying such accommodations.
“For companies looking to increase in-office work, it’s important to have a plan in place for the likely influx of remote work requests,” said Alexis C. Knapp, Littler shareholder and co-chair of the Leaves of Absence and Disability Accommodation Practice Group. “In managing these requests and communicating processes, it’s also important to distinguish between legal obligations to provide reasonable accommodations to employees with disabilities and employee requests for flexibility that do not involve a legally binding accommodation obligation.”
Key takeaways for retail employers:
- DEI concerns: Retailers should assess their DEI programs for potential litigation risks and ensure compliance with changing federal and state regulations.
- Immigration impact: Retail employers must be prepared for potential disruptions in staffing due to evolving immigration policies and increased enforcement.
- Accommodation requests: With rising mental health requests and growing demands for remote work, retailers need clear policies in place to manage employee accommodations and minimize legal exposure.
The Littler survey underscores the complexity of navigating the current regulatory environment for retail businesses. Employers face an array of shifting legal, political, and social dynamics that could significantly impact operations in 2025.
