Workforce Investment Disclosure Act of 2020

II 116TH CONGRESS 2D SESSION S. 3361 To amend the Securities Exchange Act of 1934 to require issuers to disclose to the Securities and Exchange Commission information regarding human capital management policies, practices, and performance, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 27, 2020 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 human capital manage- ment policies, practices, and performance, and for other purposes. 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 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3361 IS SEC. 2. DISCLOSURES RELATED TO HUMAN CAPITAL MAN- 1 AGEMENT. 2 Section 13 of the Securities Exchange Act of 1934 3 (15 U.S.C. 78m) is amended by adding at the end the 4 following: 5 ‘‘(s) DISCLOSURES RELATING TO HUMAN CAPITAL 6 MANAGEMENT.— 7 ‘‘(1) IN GENERAL.—Each issuer required to file 8 an annual report under subsection (a) shall disclose 9 in that report information about human capital 10 management policies, practices, and performance 11 with respect to the issuer. 12 ‘‘(2) RULES.—Not later than 270 days after 13 the date of enactment of this subsection, the Com- 14 mission shall issue final rules to carry out paragraph 15 (1), which shall require disclosure of the following 16 with respect to an issuer described in that para- 17 graph: 18 ‘‘(A) Workforce demographic information, 19 including the number of full-time employees, 20 the number of part-time employees, the number 21 of contingent workers (including temporary and 22 contract workers), and any policies or practices 23 relating to subcontracting, outsourcing, and 24 insourcing. 25 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3361 IS ‘‘(B) Workforce stability information, in- 1 cluding information about the voluntary turn- 2 over or retention rate, the involuntary turnover 3 rate, the internal hiring rate, and the internal 4 promotion rate. 5 ‘‘(C) Workforce composition, including 6 data on diversity (including racial, ethnic, and 7 gender composition) and any policies and audits 8 relating to diversity. 9 ‘‘(D) Workforce skills and capabilities, in- 10 cluding information about training of employees 11 (including the average number of hours of 12 training and spending on training per employee 13 per year), skills gaps, and alignment of skills 14 and capabilities with business strategy. 15 ‘‘(E) Workforce health and safety, includ- 16 ing information about— 17 ‘‘(i) the frequency, severity, and lost 18 time due to injuries, illness, and fatalities; 19 ‘‘(ii) the total dollar value of assessed 20 fines under the Occupational Safety and 21 Health Act of 1970 (29 U.S.C. 651 et 22 seq.); 23 ‘‘(iii) the total number of actions 24 brought under section 13 of the Occupa- 25 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3361 IS tional Safety and Health Act of 1970 (29 1 U.S.C. 662) to prevent imminent dangers; 2 and 3 ‘‘(iv) the total number of actions 4 brought against the issuer under section 5 11(c) of the Occupational Safety and 6 Health Act of 1970 (29 U.S.C. 660(c)). 7 ‘‘(F) Workforce compensation and incen- 8 tives, including information about— 9 ‘‘(i) total workforce compensation, in- 10 cluding disaggregated information about 11 compensation for full-time, part-time, and 12 contingent workers; 13 ‘‘(ii) policies and practices about how 14 performance, productivity, and sustain- 15 ability are considered when setting pay and 16 making promotion decisions; and 17 ‘‘(iii) policies and practices relating to 18 any incentives and bonuses provided to em- 19 ployees below the named executive level 20 and any policies or practices designed to 21 counter any risks created by such incen- 22 tives and bonuses. 23 ‘‘(G) Workforce recruiting and needs, in- 24 cluding the number of new jobs created, the 25 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 3361 IS worker classification of new jobs, and the new 1 hire retention rate. 2 ‘‘(3) TREATMENT OF EMERGING GROWTH COM- 3 PANIES.—The Commission may exempt emerging 4 growth companies from any disclosure required 5 under subparagraph (D), (E), (F), or (G) of para- 6 graph (2), if the Commission determines that such 7 an exemption is necessary or appropriate in the pub- 8 lic interest or for the protection of investors.’’. 9 SEC. 3. BACKSTOP. 10 (a) DEFINITIONS.—In this section— 11 (1) the term ‘‘Commission’’ means the Securi- 12 ties and Exchange Commission; 13 (2) the term ‘‘covered issuer’’ means an issuer 14 that is required to file an annual report under sec- 15 tion 13(a) of the Securities Exchange Act of 1934 16 (15 U.S.C. 78m(a)); and 17 (3) the term ‘‘issuer’’ has the meaning given 18 the term in section 3(a) of the Securities Exchange 19 Act of 1934 (15 U.S.C. 78c(a)). 20 (b) COMPLIANCE.— If, as of the date that is 2 years 21 after the date of enactment of this Act, the Commission 22 has not issued the rules required under subsection (s)(2) 23 of section 13 of the Securities Exchange Act of 1934 (15 24 U.S.C. 78m), as added by section 2 of this Act, a covered 25 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 3361 IS issuer, during the period beginning on that date and end- 1 ing on the date on which the Commission issues those 2 rules, shall be deemed to be in compliance with subsection 3 (s) of such section 13 if disclosures set forth in the annual 4 report of the covered issuer satisfy the public disclosure 5 standards of the International Organization for Standard- 6 ization’s ISO 30414, or any successor standards for exter- 7 nal human capital reporting, as supplemented or adjusted 8 by rules, guidance, or other comments from the Commis- 9 sion. 10 SEC. 4. SEC STUDY. 11 (a) DEFINITIONS.—In this section, the terms ‘‘Com- 12 mission’’ and ‘‘issuer’’ have the meanings given those 13 terms in section 3(a). 14 (b) STUDY.—The Commission shall conduct a study 15 about the value to investors of— 16 (1) information about the human rights com- 17 mitments of issuers required to file annual reports 18 under section 13(a) of the Securities Exchange Act 19 of 1934 (15 U.S.C. 78m(a)), including information 20 about any principles used to evaluate risk, constitu- 21 ency consultation processes, and supplier due dili- 22 gence; 23 (2) with respect to issuers required to file an- 24 nual reports under section 13(a) of the Securities 25 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 3361 IS Exchange Act of 1934 (15 U.S.C. 78m(a)), informa- 1 tion about— 2 (A) violations of the Fair Labor Standards 3 Act of 1938 (29 U.S.C. 201 et seq.) by those 4 issuers; and 5 (B) workforce culture and empowerment, 6 including information about— 7 (i) policies and practices of each such 8 issuer relating to freedom of association 9 and work-life balance initiatives; 10 (ii) any incidents of verified workplace 11 harassment in the previous 5 fiscal years 12 of each such issuer; and 13 (iii) the policies and practices of each 14 such issuer relating to employee engage- 15 ment and psychological wellbeing, including 16 management discussion regarding— 17 (I) the creation of a culture of 18 lifelong learning; 19 (II) fostering a sense of purpose 20 in the workforce; 21 (III) trust in management; and 22 (IV) a supportive, fair, and con- 23 structive workplace; 24 VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 3361 IS (3) disaggregating the information required to 1 be disclosed under subsection (s) of section 13 of the 2 Securities Exchange Act of 1934 (15 U.S.C. 78m), 3 as added by section 2 of this Act, based on relevant 4 workforce subgroups, including— 5 (A) full-time employees; 6 (B) part-time employees; 7 (C) contingent workers; and 8 (D) company management; and 9 (4) surveys regarding employee satisfaction and 10 engagement. 11 (c) REPORT.—Not later than 1 year after the date 12 of enactment of this Act, the Commission shall submit to 13 Congress a report that contains the results of the study 14 required to be conducted under subsection (b). 15 Æ VerDate Sep 11 2014 22:14 Feb 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S3361.IS S3361 pamtmann on DSKBC07HB2PROD with BILLS