IB Union Calendar No. 519 116TH CONGRESS 2D SESSION H. R. 5930 [Report No. 116–634] To amend the Securities Exchange Act of 1934 to require issuers to disclose information about human capital management in annual reports, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 21, 2020 Mrs. AXNE introduced the following bill; which was referred to the Committee on Financial Services DECEMBER 8, 2020 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on February 21, 2020] VerDate Sep 11 2014 04:12 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 2 •HR 5930 RH A BILL To amend the Securities Exchange Act of 1934 to require issuers to disclose information about human capital man- agement in annual reports, and for other purposes. VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 3 •HR 5930 RH 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 2020’’. 5 SEC. 2. DISCLOSURES RELATED TO HUMAN CAPITAL MAN- 6 AGEMENT. 7 Section 13 of the Securities Exchange Act of 1934 (15 8 U.S.C. 78m) is amended by adding at the end the following: 9 ‘‘(s) DISCLOSURES RELATED TO HUMAN CAPITAL 10 MANAGEMENT.— 11 ‘‘(1) IN GENERAL.—Each issuer required to file 12 an annual report under subsection (a) shall disclose 13 in that report information about human capital man- 14 agement policies, practices, and performance. 15 ‘‘(2) RULES.—Not later than 270 days after the 16 date of the enactment of this subsection, the Commis- 17 sion shall issue final rules to carry out paragraph (1) 18 and such rules shall require disclosure of the following 19 with respect to the issuer: 20 ‘‘(A) Workforce demographic information, 21 including the number of full-time employees, the 22 number of part-time employees, the number of 23 contingent workers (including temporary and 24 contract workers), and any policies or practices 25 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 4 •HR 5930 RH relating to subcontracting, outsourcing, and 1 insourcing. 2 ‘‘(B) Workforce stability information, in- 3 cluding information about the voluntary turn- 4 over or retention rate, the involuntary turnover 5 rate, the internal hiring rate, and the internal 6 promotion rate (and with such internal pro- 7 motion rate disaggregated by the workforce com- 8 position described under subparagraph (C)). 9 ‘‘(C) Workforce composition, including data 10 on diversity (including racial, gender, and eth- 11 nic composition) and any policies and audits re- 12 lated to diversity. 13 ‘‘(D) Workforce skills and capabilities, in- 14 cluding information about training of employees 15 (including the average number of hours of train- 16 ing and spending on training per employee per 17 year), skills gaps, and alignment of skills and 18 capabilities with business strategy. 19 ‘‘(E) Workforce culture and empowerment, 20 including information about— 21 ‘‘(i) policies and practices of the issuer 22 relating to freedom of association and work- 23 life balance initiatives; 24 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 5 •HR 5930 RH ‘‘(ii) any incidents of verified work- 1 place harassment in the previous 5 fiscal 2 years of the issuer; and 3 ‘‘(iii) policies and practices of the 4 issuer relating to employee engagement and 5 psychological wellbeing, including manage- 6 ment discussion regarding— 7 ‘‘(I) the creation of an autono- 8 mous work environment; 9 ‘‘(II) fostering a sense of purpose 10 in the workforce; 11 ‘‘(III) trust in management; and 12 ‘‘(IV) a supportive, fair, and con- 13 structive workplace. 14 ‘‘(F) Workforce health and safety, including 15 information about— 16 ‘‘(i) the frequency, severity, and lost 17 time due to injuries, illness, and fatalities; 18 ‘‘(ii) the total dollar value of assessed 19 fines under the Occupational Safety and 20 Health Act of 1970; 21 ‘‘(iii) the total number of actions 22 brought under section 13 of the Occupa- 23 tional Safety and Health Act of 1970 to 24 prevent imminent dangers; and 25 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 6 •HR 5930 RH ‘‘(iv) the total number of actions 1 brought against the issuer under section 2 11(c) of the Occupational Safety and 3 Health Act of 1970. 4 ‘‘(G) Workforce compensation and incen- 5 tives, including information about— 6 ‘‘(i) total workforce compensation, in- 7 cluding disaggregated information about 8 compensation for full-time, part-time, and 9 contingent workers; 10 ‘‘(ii) policies and practices about how 11 performance, productivity, and sustain- 12 ability are considered when setting pay and 13 making promotion decisions; and 14 ‘‘(iii) policies and practices relating to 15 any incentives and bonuses provided to em- 16 ployees below the named executive level and 17 any policies or practices designed to counter 18 any risks create by such incentives and bo- 19 nuses. 20 ‘‘(H) Workforce recruiting and needs, in- 21 cluding the number of new jobs created, the 22 worker classification of new jobs, information 23 about the quality of hire, and new hire retention 24 rate. 25 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 7 •HR 5930 RH ‘‘(3) TREATMENT OF EMERGING GROWTH COMPA- 1 NIES.—The Commission may exempt emerging 2 growth companies from any disclosure described 3 under subparagraph (D), (E), (F), (G), or (H) of 4 paragraph (2), if the Commission determines that 5 such exemption is necessary or appropriate in the 6 public interest or for the protection of investors.’’. 7 SEC. 3. BACKSTOP. 8 If, 2 years after the date of the enactment of this Act, 9 the Securities and Exchange Commission has not issued 10 rules required under section 13(s)(2) of the Securities Ex- 11 change Act of 1934, as added by section 2, and until such 12 rules are issued, an issuer shall be deemed in compliance 13 with section 13(s) of the Securities Exchange Act of 1934 14 if disclosures set forth in the annual report of such issuer 15 satisfy the public disclosure standards of the International 16 Organization for Standardization’s ISO 30414, or any suc- 17 cessor standards for external human capital reporting, and 18 as supplemented or adjusted by such rules, guidance, or 19 other comments from the Commission. 20 SEC. 4. SEC STUDY. 21 (a) STUDY.—The Securities and Exchange Commis- 22 sion shall conduct a study about the value to investors of— 23 (1) information about the human rights commit- 24 ments of issuers of securities required to file annual 25 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS 8 •HR 5930 RH reports under section 13(a) of the Securities Exchange 1 Act of 1934, including information about any prin- 2 ciples used to evaluate risk, constituency consultation 3 processes, and supplier due diligence; 4 (2) information about violations, by issuers of se- 5 curities required to file annual reports under section 6 13(a) of the Securities Exchange Act of 1934, of the 7 Fair Labor Standards Act of 1938; 8 (3) disaggregating the information requested in 9 section 13(s) of the Securities Exchange Act of 1934 10 based on relevant workforce subgroups, including— 11 (A) full-time employees; 12 (B) part-time employees; 13 (C) contingent workers; and 14 (D) company management; and 15 (4) surveys regarding employee satisfaction and 16 engagement. 17 (b) REPORT.—Not later than 1 year after the date of 18 the enactment of this Act, the Securities and Exchange 19 Commission shall submit to Congress a report about the 20 study conducted pursuant to subsection (a). 21 VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS VerDate Sep 11 2014 02:06 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS Union Calendar No. 519 116TH CONGRESS 2D SESSION H. R. 5930 [Report No. 116–634] A BILL To amend the Securities Exchange Act of 1934 to require issuers to disclose information about human capital management in annual reports, and for other purposes. DECEMBER 8, 2020 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 04:12 Dec 09, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6651 Sfmt 6651 E:\BILLS\H5930.RH H5930 SSpencer on DSK126QN23PROD with BILLS