Emil Davtyan and Brian Hegarty Share Insights on Employee Benefits & Effective HR Practices

This ‘Conversation with the Experts’ section is produced by the LA Times Studios team in conjunction with D.Law, Inc. and Marsh McLennan Agency.

Businesses have been navigating through a continuously altering and evolving employee benefits landscape. Return-to-work mandates, new technological advancements and workforce shortages in many industries have led to a new set of expectations, protocols and best practices when it comes to businesses determining the right benefits packages for their employees. What should C-suiters and HR professionals be focusing on in terms of new standards?

To answer that and other questions while taking a closer look at the latest developing trends in the business of employee benefits and HR best practices, we have turned to two of the region’s leading authorities, Emil Davtyan of D.Law, Inc. and Brian Hegarty of Marsh McLennan Agency, who graciously weighed in for a discussion and shared insights.

Q: Are there any new legislative, compliance or regulatory issues/trends that HR professionals should be aware of in 2025?

Emil Davtyan, Founder and Managing Attorney, D.Law, Inc.: In 2025, several new laws are creating fresh compliance challenges for HR teams. Updates to California’s pay transparency rules now require real-time salary range postings in job advertisements and internal listings, placing new demands on compensation systems. Expanded workplace surveillance disclosure rules are also in effect, requiring employers to inform employees of monitoring practices and obtain consent in certain scenarios. Federally, new EEOC guidance on AI in hiring emphasizes bias audits and transparency, catching some employers off guard who haven’t yet reviewed their algorithmic tools. Proactive policy updates and internal training are critical to staying ahead of these evolving requirements.

Brian Hegarty, Principal; Managing Director, Los Angeles, Marsh McLennan Agency: In 2025, HR professionals should be vigilant about several emerging legislative and regulatory trends that could impact their organizations. Firstly, the Affordable Care Act (ACA) marketplace continues to evolve, with potential changes in enrollment periods and subsidy structures that may affect employee health benefits. Additionally, the Inflation Reduction Act is poised to significantly influence Medicare drug prices, which could have downstream effects on employer-sponsored health plans and overall healthcare costs. The national landscape for paid family leave is also shifting, with various states implementing or expanding their programs, necessitating that HR teams stay informed to ensure compliance and support for their employees. Lastly, the focus on long-term disability and mental health parity is gaining momentum, prompting HR professionals to reassess their policies to ensure they align with new standards aimed at providing equitable support for mental health conditions. Staying abreast of these issues will be crucial for HR professionals to navigate the complexities of compliance and to foster a supportive workplace environment.

Q: How should employers navigate California’s strict meal and rest break requirements in 2025?

Davtyan: California’s meal and rest break laws remain among the strictest in the country, and non-compliance continues to drive costly litigation. In 2025, employers should focus on consistent enforcement and robust documentation. This includes clearly communicating break policies to employees, scheduling shifts to accommodate timely breaks and ensuring that breaks are duty-free and uninterrupted. Employers should also implement systems to track when breaks are taken and flag any missed or late breaks, issuing premium pay as required. Training supervisors and HR teams to proactively enforce these policies is essential. A strong compliance infrastructure not only protects workers but also helps employers avoid significant penalties.

Q: What emerging employee benefits do you see gaining traction in 2025, and why?

Hegarty: In 2025, several emerging employee benefits are expected to gain traction, reflecting the evolving needs of the workforce as highlighted in Marsh McLennan Agency’s 2025 employee benefits trends report. One significant area is support for caregivers, with organizations increasingly offering remote work benefits, flexible scheduling and enhanced family leave, childcare and fertility benefits to accommodate employees balancing work and caregiving responsibilities. Additionally, student loan repayment programs and learning opportunities are becoming more prevalent, as employers recognize the importance of investing in their employees’ education and financial well-being. There is a growing emphasis on mental well-being, with benefits that prioritize holistic health, such as Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs), alongside flexible and remote work options and financial planning resources. These trends reflect a broader commitment to fostering a supportive and inclusive workplace that addresses the diverse needs of employees in today’s dynamic environment.

Q: What are the most common mistakes HR teams make in conducting harassment investigations?

Davtyan: A few common missteps can undermine the integrity of harassment investigations. One is failing to act promptly when a complaint is raised – delays can compromise evidence and erode trust. Another mistake is bias, whether real or perceived, especially if the investigator has a close relationship with the involved parties. Incomplete documentation and inadequate communication throughout the process also pose risks. HR should avoid making premature conclusions and instead ensure the investigation is thorough, impartial and well-documented. Providing clear updates to all parties and taking appropriate corrective action when warranted are essential best practices that protect both employees and the organization.

Q: How are companies balancing cost-effectiveness with providing competitive benefits packages?

Hegarty: Companies are looking to innovative strategies to balance cost-effectiveness with the need to provide competitive benefits packages. While employers cannot control the rising costs of healthcare, they can optimize their spending strategies to mitigate ballooning prices. According to a 2024 McKinsey roundtable, high-performance networks (HPNs) have emerged as one of the most promising tools, potentially cutting costs by up to 15% and helping employers manage their healthcare expenditures more effectively. Additionally, self-insurance, traditionally favored by large organizations, is gaining traction among small and medium-sized businesses. When managed with a dynamic, data-driven strategy, it can yield long-term savings. Another effective approach is reference-based pricing, which establishes fixed maximum prices for medical services based on Medicare rates, allowing employers to avoid surprise costs and potentially save 20% to 30% annually on healthcare expenses (according to a 2022 BenefitsPRO study). These strategies can be further enhanced by utilizing data analytics and reporting tools to create more accurate forecasts of future healthcare spending. Marsh McLennan Agency’s Planning & Analytics for Total Health (PATH) transforms your data into prescriptive strategies so you can offer competitive, cost-effective benefits while empowering healthier employees. Overall, employers must carefully consider the long-term consequences of reducing benefits, as this can lead to increased employee dissatisfaction and higher turnover rates, ultimately jeopardizing their ability to attract and retain top talent.

Q: What best practices help ensure pregnancy-related accommodations are law-compliant and employee-supportive?

Davtyan: To comply with California’s pregnancy accommodation laws, employers should engage in a timely, good-faith interactive process as soon as an employee makes a request. This includes evaluating the employee’s needs, considering physician recommendations and offering reasonable accommodations, such as modified duties, schedule adjustments or temporary leave. It’s also important to educate managers about their responsibilities to avoid discriminatory remarks or actions, even unintentionally. Creating a supportive culture around pregnancy and parenthood helps ensure compliance and boosts employee morale. Documenting each step of the process protects both the employee’s rights and the employer’s legal interests.

Q: How is AI being used to improve benefits administration and employee engagement?

Hegarty: AI is increasingly transforming benefits administration and employee engagement, positioning human resources as one of the departments most affected by this technological expansion. The majority of HR leaders believe that AI will “radically change how work gets done,” (as quoted in ServiceNow’s 2024 Employee Experience trends report) with clear use cases emerging across various HR functions, including hiring, learning and development, performance management, and benefits administration. In the recruitment process, AI solutions enhance efficiency and have been shown to improve the diversity of new hires, with nearly one in three HR professionals noting this positive impact according to SHRM’s 2024 Talent Trends report. AI can also personalize learning and development materials to align with individual employee learning styles, significantly enhancing the employee experience while reducing associated costs. Organizations are leveraging AI to identify skill gaps, analyze performance metrics, and provide managers with actionable feedback, while also granting employees access to their performance data to track their progress. As HR departments prepare for the future, many are actively upskilling or reskilling employees to adapt to AI initiatives, recognizing the need for a more technology-minded approach to business decisions and organizational growth. While AI is expected to reduce workloads in the long run, the current talent and skills crunch may strain HR resources, making the integration of AI both a challenge and an opportunity for enhancing employee engagement and benefits administration.

Q: What’s the current landscape of bereavement leave rights in California?

Davtyan: California now mandates bereavement leave for eligible employees at companies with five or more workers. The law provides up to five days of unpaid leave upon the death of a qualifying family member. While the leave is unpaid, employees may use other available paid time off, such as vacation or sick leave. Employers must allow the leave to be taken within three months of the death and may request documentation, such as a death certificate or obituary. To remain compliant, employers should update their handbooks and ensure supervisors are aware of these requirements, balancing legal obligations with empathy during sensitive times.

Q: What protocols do you recommend to help companies communicate better with their workforce?

Hegarty: To enhance communication within the workplace, companies should adopt a comprehensive communication strategy that considers the diverse preferences and needs of their workforce. Employers who take the time to analyze their employee base and tailor strategies accordingly – whether through voluntary benefits that appeal to specific age groups, personalized communication methods or flexible work arrangements – position themselves as organizations that truly value their people. This approach not only addresses generational differences but also fosters a culture of inclusion where every employee feels supported. Utilizing technology to share benefits communications is essential in this context, as it allows for real-time updates and easy access to information. Companies can implement user-friendly platforms that centralize benefits information, making it accessible to all employees regardless of their preferred communication style. Additionally, incorporating interactive elements, such as webinars, video tutorials and FAQs, can further engage employees and ensure that they fully understand their benefits. By fostering an inclusive communication environment that leverages technology and tailors strategies to meet the needs of a diverse workforce, organizations can improve employee engagement, satisfaction and overall workplace harmony.

Q: How should HR document terminations to prevent wrongful termination claims?

Davtyan: Thorough documentation is the cornerstone of a defensible termination. HR should maintain clear records showing the employee’s performance issues, disciplinary actions taken, and communications about expectations and improvement opportunities. When terminating for cause, employers should document the specific policy violations and provide the employee with a written explanation. Conducting an exit interview and having a witness present during the termination meeting can further protect the employer. Importantly, all documentation should be factual, objective and free from emotional language. Well-maintained records demonstrate fairness and transparency – key elements in defending against wrongful termination claims.