[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4578 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 4578

  To amend the Securities Exchange Act of 1934 to require issuers to 
    disclose to the Securities and Exchange Commission information 
 regarding workforce management policies, practices, and performance, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 2023

 Ms. Garcia of Texas introduced the following bill; which was referred 
                 to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Securities Exchange Act of 1934 to require issuers to 
    disclose to the Securities and Exchange Commission information 
 regarding workforce management policies, practices, and performance, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workforce Investment Disclosure Act 
of 2023''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) One of the keys to the 20th century post-war economic 
        success of the United States was the ability to prepare workers 
        over the course of their lives for success through multiple 
        sectors across society. Unfortunately, during the several 
        decades preceding the date of enactment of this Act, there has 
        been a shift in business norms and in society. While Congress 
        recognizes that the technology and job skills required for some 
        jobs has changed dramatically, the private and public 
        partnership to hire workers at different education levels and 
        invest in them for the long-term is broken.
            (2) Available data from the 10-year period preceding the 
        date of enactment of this Act suggests that businesses are 
        investing less in worker training during that time period, not 
        more.
            (3) In the wake of the 2008 global financial crisis, there 
        was a well-documented decline in overall business investment. 
        That decline coincides with the wage polarization of workers 
        and an increase in spending on share buybacks and dividends, 
        leading several researchers to conclude that companies are de-
        emphasizing investment at the expense of increasing returns for 
        shareholders. The onset of a global pandemic may make that 
        trend worse, especially with respect to investments in workers.
            (4) As part of the overall decline in investment described 
        in paragraph (3), publicly traded companies are being provided 
        with incentives to prioritize investments in physical assets 
        over investments in their workforces, meaning that those 
        companies are investing in robots instead of individuals. In 
        fact, there are already signs that automation has increased 
        during the COVID-19 pandemic.
            (5) More than ever, the Federal Government, through company 
        disclosure practices, needs to understand exactly how companies 
        are investing in their workers. Over the several months 
        preceding the date of enactment of this Act, companies across 
        the United States have taken extreme actions to adapt and 
        respond to evolving workforce challenges presented by COVID-19.
            (6) JUST Capital has been tracking the responses of the 
        Standard and Poor's 100 largest public companies to their 
        workers and has found wide variation in the policies 
        implemented, as well as with respect to the disclosure of those 
        policies. Through different responses to their workforces, from 
        layoffs to workplace safety to paid leave, the COVID-19 
        pandemic is exposing the myriad ways that workforce management 
        practices of companies pose operational and reputational risks 
        for short- and long-term financial performance.
            (7) Even before the COVID-19 pandemic, there was a growing 
        body of research establishing a relationship between measurable 
        workforce management, which is the way that companies manage 
        their employees, and firm performance. In a study of 2,000 
        large companies, Harvard Law School's Labor and Work Life 
        Program found that forward-thinking workforce policies that 
        prioritize workers, such as how companies train, retain, and 
        pay their workers, are correlated with long-term financial 
        performance.
            (8) Disclosure of workforce management policies should be 
        part of a government-wide economic recovery strategy. Just as a 
        set of generally accepted accounting principles (commonly known 
        as ``GAAP'') was urgently adopted after the Great Depression, 
        standardized, comparable metrics of workforce disclosure 
        requirements in the context of the COVID-19 pandemic are 
        critical for investors to accurately measure and project 
        company performance, both in the present and in the future.
            (9) Because many companies already track workforce metrics 
        internally, moving towards a transparent disclosure regime 
        would allow investors to better judge whether companies are 
        managing risks and making the investments in their workforces 
        that are needed for long-term growth.
            (10) Businesses increasingly rely on workforce innovation 
        and intellectual capital for competitiveness. Workplace 
        benefits, particularly paid sick leave, medical leave, and 
        flexible work arrangements, critically support employee mental 
        and physical well-being.
            (11) Race- and gender-based workplace discrimination have 
        been tied to negative health outcomes, as well as lower 
        productivity, trust, morale, and satisfaction and higher rates 
        of absenteeism and turnover. Organizational reporting on 
        practices to reduce discrimination can increase employee job 
        satisfaction, performance, and engagement.
            (12) According to the Centers for Disease Control and 
        Prevention, work-related stress is the leading occupational 
        health risk and, per the American Institute of Stress, job 
        stress costs United States industry more than $300,000,000,000 
        per year in accidents, absenteeism, employee turnover, 
        diminished productivity, and medical, legal, and insurance 
        costs.
            (13) Employee health and well-being is a key asset to 
        delivering long-term value, with 80 percent of public companies 
        that took concrete actions on health and well-being having seen 
        larger improvements in financial performance.
            (14) Organizational well-being interventions can create 
        cost savings of up to 10 dollars for every dollar invested. 
        Specifically, for every dollar that employers spend on 
        workplace disease prevention and well-being programs, there is 
        a $3.27 reduction in employee medical costs and a $2.73 
        reduction in absenteeism costs. Employers that implement 
        workplace health promotion programs have seen reductions in 
        sick leave, health plan costs, and workers' compensation and 
        disability insurance costs of approximately 25 percent.
            (15) The Centers for Disease Control and Prevention has 
        found that preventable chronic conditions are a major 
        contributor to insurance premium and employee medical claim 
        costs, which are at an all-time high, and a Milken Institute 
        study shows that employers paid $2,600,000,000,000 in 2016 for 
        the indirect costs of employee chronic disease due to work 
        absences, lost wages, and reduced economic productivity.
            (16) The COVID-19 pandemic has severely impacted employee 
        physical, mental, and emotional well-being by increasing 
        stress, depression, burnout, and mortality rates of chronic 
        disease and by reducing work-life balance and financial 
        security, with these challenges likely to persist due to 
        uncertainty and instability even as employees return to work. 
        Before the COVID-19 pandemic, but especially in the face of 
        that pandemic, employers that advance policies and practices 
        that support workforce health, safety, and well-being are 
        likely to outperform competitors and benefit from lower costs.

SEC. 3. DISCLOSURES RELATING TO WORKFORCE MANAGEMENT.

    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) 
is amended by adding at the end the following:
    ``(t) Disclosures Relating to Workforce Management.--
            ``(1) Definition.--In this subsection, the term `contingent 
        worker' includes an individual performing work on a temporary 
        basis or as an independent contractor.
            ``(2) Regulations.--Not later than 2 years after the date 
        of enactment of this subsection, the Commission, in 
        consultation with the Secretary of Labor, the Secretary of 
        Commerce, the Secretary of Treasury, and the Attorney General, 
        shall promulgate regulations that require each issuer required 
        to file an annual report under subsection (a) or section 15(d) 
        to disclose in that report information regarding workforce 
        management policies, practices, and performance with respect to 
        the issuer.
            ``(3) Rules.--Consistent with the requirement under 
        paragraph (4), each annual report filed with the Commission in 
        accordance with the regulations promulgated under paragraph (2) 
        shall include disclosure of the following with respect to the 
        issuer filing the report for the year covered by the report:
                    ``(A) Workforce demographic information, 
                including--
                            ``(i) the number of full-time employees, 
                        the number of part-time employees, and the 
                        number of contingent workers (including 
                        temporary and contract workers) with respect to 
                        the issuer, which shall include demographic 
                        information with respect to those categories of 
                        individuals, including information regarding 
                        race, ethnicity, and gender;
                            ``(ii) any policies or practices of the 
                        issuer relating to subcontracting, outsourcing, 
                        and insourcing individuals to perform work for 
                        the issuer, which shall include demographic 
                        information with respect to those individuals, 
                        including information regarding race, 
                        ethnicity, and gender; and
                            ``(iii) whether the percentage of 
                        contingent workers with respect to the issuer 
                        has changed, including temporary and contract 
                        workers, as compared with the previous annual 
                        report filed by the issuer under this 
                        subsection.
                    ``(B) Workforce stability information, including 
                information about the voluntary turnover or retention 
                rate, the involuntary turnover rate, the internal 
                hiring rate, and the internal promotion rate, and the 
                horizontal job change rate by quintile and demographic 
                information.
                    ``(C) Workforce composition, including--
                            ``(i) data on diversity (including racial, 
                        ethnic, and gender composition) for senior 
                        executives and other individuals in the 
                        workforce; and
                            ``(ii) any policies, audits, and 
                        programming expenditures relating to diversity.
                    ``(D) Workforce skills and capabilities, 
                including--
                            ``(i) information about training and cross-
                        training of employees and contingent workers by 
                        quintile and demographic information, 
                        distinguishing between compliance training, 
                        career development training, job performance or 
                        technical training, and training tied to 
                        recognized postsecondary credentials;
                            ``(ii) average number of hours of training 
                        for each employee and contingent worker;
                            ``(iii) total spending on training for all 
                        employees and contingent workers;
                            ``(iv) average spending per employee or 
                        contingent worker;
                            ``(v) training utilization rates; and
                            ``(vi) whether completion of training 
                        opportunities translates into value added 
                        benefit for workers, as determined by wage 
                        increases or internal promotions.
                    ``(E) Workforce health, safety, and well-being, 
                including information regarding--
                            ``(i) the frequency, severity, and lost 
                        time due to injuries, physical and mental 
                        illness, and fatalities;
                            ``(ii) the scope, frequency, and total 
                        expenditure on workplace health, safety, and 
                        well-being programs;
                            ``(iii) the total dollar value of assessed 
                        fines under the Occupational Safety and Health 
                        Act of 1970 (29 U.S.C. 651 et seq.);
                            ``(iv) the total number of actions brought 
                        under section 13 of the Occupational Safety and 
                        Health Act of 1970 (29 U.S.C. 662) to prevent 
                        imminent dangers;
                            ``(v) the total number of actions brought 
                        against the issuer under section 11(c) of the 
                        Occupational Safety and Health Act of 1970 (29 
                        U.S.C. 660(c));
                            ``(vi) any findings of workplace harassment 
                        or workplace discrimination during the 5 fiscal 
                        year period of the issuer preceding the fiscal 
                        year in which the report is filed; and
                            ``(vii) communication channels and 
                        grievance mechanisms in place for employees and 
                        contingent workers.
                    ``(F) Workforce compensation and incentives, 
                including information regarding--
                            ``(i) total workforce costs, including 
                        salaries and wages, health benefits, other 
                        ancillary benefit costs, and pension costs;
                            ``(ii) workforce benefits, including paid 
                        leave, health care, child care, and retirement, 
                        including information regarding benefits that 
                        are provided--
                                    ``(I) to full-time employees and 
                                not to part-time employees; or
                                    ``(II) to employees and not to 
                                contingent workers;
                            ``(iii) total contributions made to 
                        unemployment insurance by the issuer, how many 
                        employees to whom those contributions apply, 
                        and the total amount paid in unemployment 
                        compensation to individuals who were laid off 
                        by the issuer;
                            ``(iv) policies and practices regarding how 
                        performance, productivity, equity, and 
                        sustainability are considered when setting pay 
                        and making promotion decisions; and
                            ``(v) policies and practices relating to 
                        any incentives and bonuses provided to 
                        employees and any policies or practices 
                        designed to counter any risks created by such 
                        incentives and bonuses.
                    ``(G) Workforce recruiting and needs, including--
                            ``(i) the number of new jobs created, 
                        seeking to be filled, and filled, disaggregated 
                        based on classification status;
                            ``(ii) the share of new jobs that require a 
                        bachelor's degree or higher;
                            ``(iii) information regarding the quality 
                        of hire for jobs described in clause (i); and
                            ``(iv) the retention rate for individuals 
                        hired to fill the jobs described in clause (i).
                    ``(H) Workforce engagement and productivity, 
                including information regarding policies and practices 
                of the issuer relating to--
                            ``(i) engagement, productivity, and mental 
                        well-being of employees and contingent workers, 
                        as determined in consultation with the 
                        Department of Labor; and
                            ``(ii) freedom of association and work-life 
                        balance initiatives, including flexibility and 
                        the ability of the workforce to work remotely, 
                        as determined in consultation with the 
                        Department of Labor.
            ``(4) Disaggregation of information.--To the maximum extent 
        feasible, the information described in paragraph (3) shall be 
        disaggregated by--
                    ``(A) the workforce composition described in 
                subparagraph (C) of that paragraph;
                    ``(B) wage quintiles of the employees of the issuer 
                for the year covered by the applicable annual report; 
                and
                    ``(C) the employment status of individuals 
                performing services for the issuer, including whether 
                those individuals are full-time employees, part-time 
                employees, or contingent workers.
            ``(5) Treatment of emerging growth companies.--The 
        Commission may exempt emerging growth companies from any 
        disclosure required under subparagraph (D), (E), (F), (G), or 
        (H) of paragraph (3) if the Commission determines that such an 
        exemption is necessary or appropriate in the public interest.
            ``(6) False or misleading statements.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), it shall be unlawful for any person, 
                in any report or document filed under this subsection, 
                to make or cause to be made any untrue statement of a 
                material fact or omit to state a material fact required 
                to be stated in the report or document or necessary to 
                make the statement made, in the light of the 
                circumstances under which it is made, not misleading.
                    ``(B) Exception.--A person shall not be liable 
                under subparagraph (A) if the person shows that the 
                person had, after reasonable investigation, reasonable 
                ground to believe, and did believe, at the time the 
                applicable statement was made, that the statement was 
                true and that there was no omission to state a material 
                fact necessary to make the statement made, in the light 
                of the circumstances under which it is made, not 
                misleading.
                    ``(C) No private right of action.--Nothing in this 
                paragraph may be construed as creating a private right 
                of action.
            ``(7) Exemption.--This subsection shall not apply to an 
        investment company registered under section 8 of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-8).''.

SEC. 4. BACKSTOP.

    (a) Definitions.--In this section--
            (1) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (2) the term ``covered issuer'' means an issuer that is 
        required to file an annual report under section 13(a) or 
        section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78m(a), 78o(d)); and
            (3) the term ``issuer'' has the meaning given the term in 
        section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)).
    (b) Compliance.--If, as of the date that is 2 years after the date 
of enactment of this Act, the Commission has not promulgated the 
regulations required under subsection (t) of section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m), as added by section 3 
of this Act, a covered issuer, during the period beginning on that date 
and ending on the date on which the Commission promulgates those 
regulations, shall be deemed to be in compliance with such subsection 
(t) if disclosures set forth in the annual report of the covered issuer 
satisfy the public disclosure standards of the International 
Organization for Standardization's ISO 30414, or any successor 
standards for external workforce reporting, as supplemented or adjusted 
by rules, guidance, or other comments from the Commission.

SEC. 5. SEC STUDY.

    (a) Definitions.--In this section, the terms ``Commission'' and 
``issuer'' have the meanings given those terms in section 4(a).
    (b) Study.--The Commission shall conduct a study about the value to 
investors of--
            (1) information about the human rights commitments of 
        issuers required to file annual reports under section 13(a) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)), 
        including information about any principles used to evaluate 
        risk, constituency consultation processes, and supplier due 
        diligence; and
            (2) with respect to issuers required to file annual reports 
        under section 13(a) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78m(a)), information about--
                    (A) violations of the Fair Labor Standards Act of 
                1938 (29 U.S.C. 201 et seq.) by those issuers;
                    (B) violations of worker misclassification by those 
                issuers;
                    (C) surveys regarding employee satisfaction, well-
                being, and engagement;
                    (D) the number and overall percentage of quality 
                jobs, as determined by compensation above median wage 
                and comprehensive employer-provided benefits; and
                    (E) information about workforce investment trends, 
                as determined by at least a 3-year time period.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Commission shall submit to Congress a report that 
contains the results of the study required to be conducted under 
subsection (b), with recommendations for additional disclosure 
regulations based on the findings, and any actions the Commission plans 
to take to enhance disclosures based on the findings.
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