Workforce Investment Disclosure Act of 2021

II 117TH CONGRESS 1ST SESSION S. 1815 To amend the Securities Exchange Act of 1934 to require issuers to disclose to the Securities and Exchange Commission information regarding work- force management policies, practices, and performance, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 25, 2021 Mr. WARNER introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Securities Exchange Act of 1934 to require issuers to disclose to the Securities and Exchange Com- mission information regarding workforce management policies, practices, and performance, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Workforce Investment 4 Disclosure Act of 2021’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1815 IS (1) One of the keys to the 20th century post- 1 war economic success of the United States was the 2 ability to prepare workers over the course of their 3 lives for success through multiple sectors across soci- 4 ety. Unfortunately, during the several decades pre- 5 ceding the date of enactment of this Act, there has 6 been a shift in business norms and in society. While 7 Congress recognizes that the technology and job 8 skills required for some jobs has changed dramati- 9 cally, the private and public partnership to hire 10 workers at different education levels and invest in 11 them for the long-term is broken. 12 (2) Available data from the 10-year period pre- 13 ceding the date of enactment of this Act suggests 14 that businesses are investing less in worker training 15 during that time period, not more. 16 (3) In the wake of the 2008 global financial cri- 17 sis, there was a well-documented decline in overall 18 business investment. That decline coincides with the 19 wage polarization of workers and an increase in 20 spending on share buybacks and dividends, leading 21 several researchers to conclude that companies are 22 de-emphasizing investment at the expense of increas- 23 ing returns for shareholders. The onset of a global 24 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1815 IS pandemic may make that trend worse, especially 1 with respect to investments in workers. 2 (4) As part of the overall decline in investment 3 described in paragraph (3), publicly traded compa- 4 nies are being provided with incentives to prioritize 5 investments in physical assets over investments in 6 their workforces, meaning that those companies are 7 investing in robots instead of individuals. In fact, 8 there are already signs that automation has in- 9 creased during the COVID–19 pandemic. 10 (5) More than ever, the Federal Government, 11 through company disclosure practices, needs to un- 12 derstand exactly how companies are investing in 13 their workers. Over the several months preceding the 14 date of enactment of this Act, companies across the 15 United States have taken extreme actions to adapt 16 and respond to evolving workforce challenges pre- 17 sented by COVID–19. 18 (6) JUST Capital has been tracking the re- 19 sponses of the Standard and Poor’s 100 largest pub- 20 lic companies to their workers and has found wide 21 variation in the policies implemented, as well as with 22 respect to the disclosure of those policies. Through 23 different responses to their workforces, from layoffs 24 to workplace safety to paid leave, the COVID–19 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1815 IS pandemic is exposing the myriad ways that work- 1 force management practices of companies pose oper- 2 ational and reputational risks for short- and long- 3 term financial performance. 4 (7) Even before the COVID–19 pandemic, there 5 was a growing body of research establishing a rela- 6 tionship between measurable workforce management, 7 which is the way that companies manage their em- 8 ployees, and firm performance. In a study of 2,000 9 large companies, Harvard Law School’s Labor and 10 Work Life Program found that forward-thinking 11 workforce policies that prioritize workers, such as 12 how companies train, retain, and pay their workers, 13 are correlated with long-term financial performance. 14 (8) Disclosure of workforce management poli- 15 cies should be part of a Government-wide economic 16 recovery strategy. Just as a set of generally accepted 17 accounting principles (commonly known as 18 ‘‘GAAP’’) was urgently adopted after the Great De- 19 pression, standardized, comparable metrics of work- 20 force disclosure requirements in the context of the 21 COVID–19 pandemic are critical for investors to ac- 22 curately measure and project company performance, 23 both in the present and in the future. 24 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1815 IS (9) Because many companies already track 1 workforce metrics internally, moving towards a 2 transparent disclosure regime would allow investors 3 to better judge whether companies are managing 4 risks and making the investments in their 5 workforces that are needed for long-term growth. 6 (10) Businesses increasingly rely on workforce 7 innovation and intellectual capital for competitive- 8 ness. Workplace benefits, particularly paid sick 9 leave, medical leave, and flexible work arrangements, 10 critically support employee mental and physical well- 11 being. 12 (11) Race- and gender-based workplace dis- 13 crimination have been tied to negative health out- 14 comes, as well as lower productivity, trust, morale, 15 and satisfaction and higher rates of absenteeism and 16 turnover. Organizational reporting on practices to 17 reduce discrimination can increase employee job sat- 18 isfaction, performance, and engagement. 19 (12) According to the Centers for Disease Con- 20 trol and Prevention, work-related stress is the lead- 21 ing occupational health risk and, per the American 22 Institute of Stress, job stress costs United States in- 23 dustry more than $300,000,000,000 per year in ac- 24 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1815 IS cidents, absenteeism, employee turnover, diminished 1 productivity, and medical, legal, and insurance costs. 2 (13) Employee health and well-being is a key 3 asset to delivering long-term value, with 80 percent 4 of public companies that took concrete actions on 5 health and well-being having seen larger improve- 6 ments in financial performance. 7 (14) Organizational well-being interventions can 8 create cost savings of up to 10 dollars for every dol- 9 lar invested. Specifically, for every dollar that em- 10 ployers spend on workplace disease prevention and 11 well-being programs, there is a $3.27 reduction in 12 employee medical costs and a $2.73 reduction in ab- 13 senteeism costs. Employers that implement work- 14 place health promotion programs have seen reduc- 15 tions in sick leave, health plan costs, and workers’ 16 compensation and disability insurance costs of ap- 17 proximately 25 percent. 18 (15) The Centers for Disease Control and Pre- 19 vention has found that preventable chronic condi- 20 tions are a major contributor to insurance premium 21 and employee medical claim costs, which are at an 22 all-time high, and a Milken Institute study shows 23 that employers paid $2,600,000,000,000 in 2016 for 24 the indirect costs of employee chronic disease due to 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1815 IS work absences, lost wages, and reduced economic 1 productivity. 2 (16) The COVID–19 pandemic has severely im- 3 pacted employee physical, mental, and emotional 4 well-being by increasing stress, depression, burnout, 5 and mortality rates of chronic disease and by reduc- 6 ing work-life balance and financial security, with 7 these challenges likely to persist due to uncertainty 8 and instability even as employees return to work. 9 Before the COVID–19 pandemic, but especially in 10 the face of that pandemic, employers that advance 11 policies and practices that support workforce health, 12 safety, and well-being are likely to outperform com- 13 petitors and benefit from lower costs. 14 SEC. 3. DISCLOSURES RELATING TO WORKFORCE MANAGE- 15 MENT. 16 Section 13 of the Securities Exchange Act of 1934 17 (15 U.S.C. 78m) is amended by adding at the end the 18 following: 19 ‘‘(s) DISCLOSURES RELATING TO WORKFORCE MAN- 20 AGEMENT.— 21 ‘‘(1) DEFINITION.—In this subsection, the term 22 ‘contingent worker’ includes an individual per- 23 forming work on a temporary basis or as an inde- 24 pendent contractor. 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1815 IS ‘‘(2) REGULATIONS.—Not later than 2 years 1 after the date of enactment of this subsection, the 2 Commission, in consultation with the Secretary of 3 Labor, the Secretary of Commerce, the Secretary of 4 Treasury, and the Attorney General, shall promul- 5 gate regulations that require each issuer required to 6 file an annual report under subsection (a) or section 7 15(d) to disclose in that report information regard- 8 ing workforce management policies, practices, and 9 performance with respect to the issuer. 10 ‘‘(3) RULES.—Consistent with the requirement 11 under paragraph (4), each annual report filed with 12 the Commission in accordance with the regulations 13 promulgated under paragraph (2) shall include dis- 14 closure of the following with respect to the issuer fil- 15 ing the report for the year covered by the report: 16 ‘‘(A) Workforce demographic information, 17 including— 18 ‘‘(i) the number of full-time employ- 19 ees, the number of part-time employees, 20 and the number of contingent workers (in- 21 cluding temporary and contract workers) 22 with respect to the issuer, which shall in- 23 clude demographic information with re- 24 spect to those categories of individuals, in- 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1815 IS cluding information regarding race, eth- 1 nicity, and gender; 2 ‘‘(ii) any policies or practices of the 3 issuer relating to subcontracting, outsourc- 4 ing, and insourcing individuals to perform 5 work for the issuer, which shall include de- 6 mographic information with respect to 7 those individuals, including information re- 8 garding race, ethnicity, and gender; and 9 ‘‘(iii) whether the percentage of con- 10 tingent workers with respect to the issuer 11 has changed, including temporary and con- 12 tract workers, as compared with the pre- 13 vious annual report filed by the issuer 14 under this subsection. 15 ‘‘(B) Workforce stability information, in- 16 cluding information about the voluntary turn- 17 over or retention rate, the involuntary turnover 18 rate, the internal hiring rate, and the internal 19 promotion rate, and the horizontal job change 20 rate by quintile and demographic information. 21 ‘‘(C) Workforce composition, including— 22 ‘‘(i) data on diversity (including ra- 23 cial, ethnic, and gender composition) for 24 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1815 IS senior executives and other individuals in 1 the workforce; and 2 ‘‘(ii) any policies, audits, and pro- 3 gramming expenditures relating to diver- 4 sity. 5 ‘‘(D) Workforce skills and capabilities, in- 6 cluding— 7 ‘‘(i) information about training and 8 cross-training of employees and contingent 9 workers by quintile and demographic infor- 10 mation, distinguishing between compliance 11 training, career development training, job 12 performance or technical training, and 13 training tied to recognized postsecondary 14 credentials; 15 ‘‘(ii) average number of hours of 16 training for each employee and contingent 17 worker; 18 ‘‘(iii) total spending on training for all 19 employees and contingent workers; 20 ‘‘(iv) average spending per employee 21 or contingent worker; 22 ‘‘(v) training utilization rates; and 23 ‘‘(vi) whether completion of training 24 opportunities translates into value added 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1815 IS benefit for workers, as determined by wage 1 increases or internal promotions. 2 ‘‘(E) Workforce health, safety, and well- 3 being, including information regarding— 4 ‘‘(i) the frequency, severity, and lost 5 time due to injuries, physical and mental 6 illness, and fatalities; 7 ‘‘(ii) the scope, frequency, and total 8 expenditure on workplace health, safety, 9 and well-being programs; 10 ‘‘(iii) the total dollar value of assessed 11 fines under the Occupational Safety and 12 Health Act of 1970 (29 U.S.C. 651 et 13 seq.); 14 ‘‘(iv) the total number of actions 15 brought under section 13 of the Occupa- 16 tional Safety and Health Act of 1970 (29 17 U.S.C. 662) to prevent imminent dangers; 18 ‘‘(v) the total number of actions 19 brought against the issuer under section 20 11(c) of the Occupational Safety and 21 Health Act of 1970 (29 U.S.C. 660(c)); 22 ‘‘(vi) any findings of workplace har- 23 assment or workplace discrimination dur- 24 ing the 5 fiscal year period of the issuer 25 VerDate Sep 11 2014 01:56 Jun 11, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1815.IS S1815 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1815 IS preceding the fiscal year in which the re- 1 port is filed; and 2 ‘‘(vii) communication channels and 3 grievance mechanisms in place for employ- 4 ees and contingent workers. 5 ‘‘(F) Workforce compensation and incen- 6 tives, including information regarding— 7 ‘‘(i) total workforce costs, including 8 salaries and wages, health benefits, other 9 ancillary benefit costs, and pension costs; 10 ‘‘(ii) workforce benefits, including 11 paid leave, health care, child care, and re- 12 tiremen [Text truncated for display. Full text available on Congress.gov.]