What This Bill Does
This bill requires the Securities and Exchange Commission (an agency that regulates financial markets) to expand rules that currently allow companies to offer company stock to employees as part of their pay. The bill extends these same stock offerings to other people who provide goods, labor or services to the company for money. The bill also prevents states from passing laws that automatically classify these workers as employees.
Who It Affects
- Gig workers and other individuals providing goods, labor or services for payment to companies
- Companies that want to offer stock to these workers
- The Securities and Exchange Commission
- State governments
- Users of company platforms (at the company's choice)
Key Provisions
- Stock offering exemptions that apply to employees now also apply to non-employee workers providing goods for sale, labor or services for payment to a company or the company's customers, including platform users if the company chooses (Sec. 2(a))
- The Securities and Exchange Commission must adjust dollar limits annually to match inflation as measured by the Consumer Price Index (Sec. 2(b))
- The Securities and Exchange Commission must update its rules to include these non-employee workers and cannot make changes that restrict access to stock compensation for employees or other qualifying workers (Sec. 2(c))
- State laws that assume someone is an employee based on providing goods, labor or services for payment are overridden by federal law (Sec. 3)
What Changes
Non-employee workers can now receive company stock offerings under the same exemptions that previously applied only to employees. States cannot enforce laws that automatically classify independent contractors as employees.
Important Definitions
- "Remuneration" means payment for work or services
- "Preempted" means overridden by federal law
- "Issuer" means the company offering the stock
Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 2612
To require the Securities and Exchange Commission to extend exemptions
for securities offered as part of employee pay to other individuals pro-
viding goods for sale, labor, or services for remuneration, to preempt
certain provisions of State law with respect to wage rates and benefits,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2023
Mr. MCHENRY introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on Edu-
cation and the Workforce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
A BILL
To require the Securities and Exchange Commission to ex-
tend exemptions for securities offered as part of employee
pay to other individuals providing goods for sale, labor,
or services for remuneration, to preempt certain provi-
sions of State law with respect to wage rates and bene-
fits, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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•HR 2612 IH
SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Gig Worker Equity
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Compensation Act’’.
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SEC. 2. EXTENSION OF RULE 701.
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(a) IN GENERAL.—The exemption provided under
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section 230.701 of title 17, Code of Federal Regulations,
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shall apply to individuals (other than employees) providing
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goods for sale, labor, or services for remuneration to either
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an issuer or to customers of an issuer to the same extent
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as such exemptions apply to employees of the issuer. For
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purposes of the previous sentence, the term ‘‘customers’’
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may, at the election of an issuer, include users of the
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issuer’s platform.
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(b) ADJUSTMENT FOR INFLATION.—The Securities
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and Exchange Commission shall annually adjust the dollar
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figure under section 230.701(e) of title 17, Code of Fed-
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eral Regulations, to reflect the percentage change in the
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Consumer Price Index for All Urban Consumers published
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by the Bureau of Labor Statistics of the Department of
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Labor.
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(c) RULEMAKING.—The Securities and Exchange
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Commission—
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(1) shall revise section 230.701 of title 17,
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Code of Federal Regulations, to reflect the require-
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ments of this section; and
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•HR 2612 IH
(2) may not revise such section 230.701 in any
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manner that would have the effect of restricting ac-
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cess to equity compensation for employees or individ-
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uals described under subsection (a).
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SEC. 3. PREEMPTION OF CERTAIN PROVISIONS OF STATE
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LAW.
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Any provision of a State law with respect to wage
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rates or benefits that creates a presumption that an indi-
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vidual providing goods for sale, labor, or services for remu-
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neration for a person is an employee of such person under
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such law is preempted.
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SEC. 4. GAO STUDY.
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Not later than the end of the 3-year period beginning
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on the date of enactment of this Act, the Comptroller Gen-
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eral of the United States shall carry out a study on the
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effects of this Act and submit a report on such study to
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the Congress.
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Æ
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