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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2391 Introduced in Senate (IS)]

<DOC>

116th CONGRESS
  1st Session
                                S. 2391

  To amend the Securities Exchange Act of 1934 to impose requirements 
 relating to the purchase of certain equity securities by issuers, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 31, 2019

   Mr. Brown 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 impose requirements 
 relating to the purchase of certain equity securities by issuers, 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 ``Stock Buyback Reform and Worker 
Dividend Act of 2019''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Over the last several decades--
                    (A) the volume and value of stock buybacks have 
                increased significantly, with particularly large 
                increases occurring in the 15 years preceding the date 
                of enactment of this Act; and
                    (B) the wealth gap in the United States has widened 
                drastically, as corporate profits and executive 
                compensation have skyrocketed, but, for workers, 
                salaries and wages have barely increased and purchasing 
                power has remained the same.
            (2) Between 2004 and 2013, some of the largest companies in 
        the United States spent at least 100 percent of their net 
        income on stock buybacks and, between 2010 and 2017, companies 
        in the United States spent more than $3,000,000,000,000 on 
        those buybacks. After the enactment of changes to the tax laws 
        of the United States in December 2017, companies in the United 
        States further increased stock buyback activity.
            (3) In 2018--
                    (A) companies listed in the S&P 500 index spent 
                $806,400,000,000 purchasing their own stock, an amount 
                that is 55 percent higher than in 2017 and 36 percent 
                higher than in 2007, the year that--
                            (i) had previously held the record for the 
                        largest total buyback amount; and
                            (ii) marked the beginning of the most 
                        significant financial crisis since the Great 
                        Depression; and
                    (B) companies spent more money on stock buybacks 
                than on debt payments, capital expenditures, research 
                and development, or dividends.
            (4) Stock buybacks benefit large shareholders and corporate 
        executives, the pay packages of whom include significant stock 
        compensation. Those buybacks can also increase the earnings per 
        share for a company and nearly \1/2\ of the companies listed in 
        the S&P 500 index link executive compensation to earnings per 
        share.
            (5) Compared to the typical worker, the compensation for a 
        chief executive officer (referred to in this paragraph as a 
        ``CEO'') has increased significantly. In 1989, the ratio of 
        CEO-to-worker compensation was 58 to 1, but, in 2017, that 
        ratio was 312 to 1. Over roughly the same period of time, the 
        wealth gap in the United States has widened considerably. 
        Between 1989 and 2016, the share of wealth in the United States 
        held by the top 1 percent of individuals in the United States 
        with respect to annual income increased from just below 30 
        percent to nearly 39 percent, while the share of wealth held by 
        the bottom 90 percent of individuals in the United States with 
        respect to annual income dropped from slightly more than 33 
        percent to less than 23 percent.
            (6) Since 2000, corporate profits, as a percentage of total 
        income in the United States, have increased by nearly 5 
        percentage points while workers' salaries, as a percentage of 
        that total income, have decreased by 4 percentage points.
            (7) The economic strength of the United States is 
        undermined by the wealth gap described in this section. 
        According to the Organisation for Economic Co-operation and 
        Development, increasing income inequality in the United States 
        between 1990 and 2010 reduced the per capita gross domestic 
        product of the United States by approximately 5 percentage 
        points.
            (8) Left unaddressed, the patterns of corporate excess and 
        growing wealth inequality described in this section will worsen 
        and workers will continue to contribute to corporate profits 
        without sharing in those profits.

SEC. 3. REPURCHASE OF COMMON STOCK.

    (a) Repeal of Safe Harbor.--Section 240.10b-18 of title 17, Code of 
Federal Regulations, shall have no force or effect.
    (b) Disclosure and Other Requirements.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 9 
(15 U.S.C. 78i) the following:

``SEC. 9A. ISSUER COMMON STOCK REPURCHASES.

    ``(a) Definitions.--
            ``(1) In general.--Except as provided in paragraph (2), in 
        this section, the definitions of terms in section 240.10b-18(a) 
        of title 17, Code of Federal Regulations, as in effect on the 
        day before the date of enactment of this section, shall apply 
        to any such term that appears in this section.
            ``(2) Covered purchase.--The term `covered purchase'--
                    ``(A) means a purchase (or any bid or limit order 
                that would effect such purchase) of the common stock of 
                an issuer (or an equivalent interest, including a unit 
                of beneficial interest in a trust or limited 
                partnership or a depository share) by or for the issuer 
                or any affiliated purchaser (including riskless 
                principal transactions);
                    ``(B) includes a purchase described in subparagraph 
                (A) that is effected during a transaction described in 
                subparagraph (C)(iv) in which the consideration is 
                solely cash and there is no valuation period; and
                    ``(C) does not include a purchase described in 
                subparagraph (A) that is effected--
                            ``(i) during the applicable restricted 
                        period of a distribution that is subject to 
                        section 242.102 of title 17, Code of Federal 
                        Regulations, or any successor regulation;
                            ``(ii) by or for an issuer plan by an agent 
                        independent of the issuer;
                            ``(iii) as a fractional share purchase (a 
                        fractional interest in a security) evidenced by 
                        a script certificate, order form, or similar 
                        document;
                            ``(iv) during the period from the time of 
                        public announcement, as defined in section 
                        230.165(f) of title 17, Code of Federal 
                        Regulations, or any successor regulation, of a 
                        merger, acquisition, or similar transaction 
                        involving a recapitalization, until the earlier 
                        of the completion of that transaction or the 
                        completion of the vote by target shareholders;
                            ``(v) pursuant to section 240.13e-1 of 
                        title 17, Code of Federal Regulations, or any 
                        successor regulation;
                            ``(vi) pursuant to a tender offer that is 
                        subject to or specifically excepted from 
                        section 240.13e-4 of title 17, Code of 
                        Regulations, or any successor regulation; or
                            ``(vii) pursuant to a tender offer that is 
                        subject to section 14(d), and any rules or 
                        regulations prescribed by the Commission 
                        relating to that section.
    ``(b) Requirement.--
            ``(1) In general.--Except as provided in paragraph (2), it 
        shall be unlawful as a fraudulent, deceptive, or manipulative 
        act or practice under section 9(a)(2) or 10(b) of this Act or 
        section 240.10b-5 of title 17, Code of Federal Regulations, or 
        any successor regulation, for an issuer or affiliated purchaser 
        of the issuer to effect a repurchase of the common stock of the 
        issuer unless the issuer or affiliated purchaser, as 
        applicable, complies with the requirements under this section.
            ``(2) Exceptions.--Paragraph (1) shall not apply--
                    ``(A) to an issuer or affiliated purchaser of an 
                issuer if--
                            ``(i) a violation of the requirements under 
                        this section occurred solely by reason of the 
                        conduct of a broker, dealer, or other person 
                        acting for the issuer or affiliated purchaser;
                            ``(ii) the issuer or affiliated purchaser 
                        did not know or have reason to know that the 
                        broker, dealer, or other person was engaging or 
                        would engage in that conduct; and
                            ``(iii) the issuer or affiliated purchaser 
                        had taken reasonable steps to ensure that the 
                        broker, dealer, or other person would comply 
                        with the requirements under this section; or
                    ``(B) to a broker, dealer, or other person acting 
                for an issuer or affiliated purchaser of the issuer 
                if--
                            ``(i) a violation of the requirements under 
                        this section occurred solely by reason of the 
                        conduct of the issuer or affiliated purchaser; 
                        and
                            ``(ii) the broker, dealer, or other person 
                        did not know or have reason to know that the 
                        issuer or affiliated purchaser was engaging or 
                        would engage in conduct that would violate the 
                        requirements under this section.
    ``(c) Disclosure.--
            ``(1) In general.--Any issuer or affiliated purchaser of 
        the issuer that seeks to effect a plan or program to repurchase 
        common stock of the issuer shall, on or before the date on 
        which the issuer or affiliated purchaser begins repurchasing 
        common stock under the plan or program, disclose to the 
        Commission on a Form 8-K a filing that includes--
                    ``(A) the economic rationale, long-term benefits, 
                and reason for the repurchase;
                    ``(B) the minimum and maximum number (if any) of 
                shares of common stock to be repurchased, and the 
                dollar value to be spent, under the plan or program;
                    ``(C) the manner and method of repurchase, 
                including any price guidelines or limitations, or 
                contractual plan or arrangement;
                    ``(D) the intended disposition or treatment of the 
                repurchased common stock;
                    ``(E) whether any executive officer of the issuer 
                or affiliated purchaser is purchasing common stock 
                during the pendency of the repurchase;
                    ``(F) whether any executive officer of the issuer 
                or affiliated purchaser is permitted, or intends, to 
                sell common stock during the pendency of the 
                repurchase;
                    ``(G) a summary of any communications between the 
                issuer and any holders of common stock of the issuer 
                regarding the scope and implementation of the plan or 
                program; and
                    ``(H) the source of funds for the repurchase, 
                specifying if any debt will be incurred by the issuer 
                or affiliated purchaser.
            ``(2) Weekly disclosure.--
                    ``(A) In general.--In addition to the requirement 
                under paragraph (1), each issuer that effects a 
                repurchase of common stock of the issuer in any 
                calendar week shall, not later than the last business 
                day of the following week, file with the Commission a 
                public disclosure filing (in such form and manner as 
                the Commission shall, by rule, establish) that 
                identifies--
                            ``(i) the number of shares of common stock 
                        of the issuer that the issuer repurchased;
                            ``(ii) the average price paid per share 
                        during the week covered by the filing; and
                            ``(iii) the identity of any broker-dealer 
                        that effected the purchase during the week 
                        covered by the filing.
                    ``(B) No repurchase.--An issuer shall not be 
                required to submit a filing under subparagraph (A) with 
                respect to any calendar week in which the issuer does 
                not repurchase the common stock of the issuer.
            ``(3) Definition.--In this subsection, the term `executive 
        officer' has the meaning given the term in section 240.3b-7 of 
        title 17, Code of Federal Regulations, as in effect on the day 
        before the date of enactment of this section.
    ``(d) Purchasing Requirements.--
            ``(1) One broker or dealer.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) and paragraph (2)(B)(ii), a covered 
                purchase shall be effected from or through only 1 
                broker or dealer on any single day.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to a covered purchase that is not solicited by or on 
                behalf of an issuer or an affiliated purchaser of the 
                issuer.
                    ``(C) Same broker or dealer.--If a covered purchase 
                is effected by or on behalf of not less than 1 
                affiliated purchaser of an issuer (or the issuer and 
                not less than 1 of the affiliated purchasers of the 
                issuer) on a single day, the issuer and all affiliated 
                purchasers shall use the same broker or dealer.
                    ``(D) Limited access to liquidity.--If a covered 
                purchase is effected on behalf of an issuer by a 
                broker-dealer that is not an electronic communication 
                network or other alternative trading system, that 
                broker-dealer can access electronic communication 
                network or other alternative trading system liquidity 
                in order to execute a repurchase of common stock on 
                behalf of the issuer or any affiliated purchaser of the 
                issuer on that day.
            ``(2) Time of purchases.--
                    ``(A) In general.--A covered purchase effected by 
                an issuer or an affiliated purchaser of an issuer shall 
                not be--
                            ``(i) the opening (regular way) purchase 
                        reported in the consolidated system;
                            ``(ii) except as provided in subparagraph 
                        (B), effected during the 10 minutes before the 
                        scheduled close of the primary trading session 
                        in the principal market for the security, and 
                        the 10 minutes before the scheduled close of 
                        the primary trading session in the market where 
                        the purchase is effected, for a security that 
                        has an average daily trading volume reported 
                        for that security during the 4 calendar weeks 
                        preceding the week in which the purchase is to 
                        be effected of not less than $1,000,000 and a 
                        public float value of not less than 
                        $150,000,000; or
                            ``(iii) effected during the 30 minutes 
                        before the scheduled close of the primary 
                        trading session in the principal market for the 
                        security, and the 30 minutes before the 
                        scheduled close of the primary trading session 
                        in the market where the purchase is effected, 
                        for all other securities.
                    ``(B) Purchase following close of primary trading 
                session.--
                            ``(i) In general.--A covered purchase may 
                        be effected following the close of the primary 
                        trading session until the termination of the 
                        period in which last sale prices are reported 
                        in the consolidated system if--
                                    ``(I) the covered purchase is 
                                effected at a price that does not 
                                exceed the lower of--
                                            ``(aa) the closing price of 
                                        the primary trading session in 
                                        the principal market for the 
                                        security; or
                                            ``(bb) any lower bids or 
                                        sale prices subsequently 
                                        reported in the consolidated 
                                        system; and
                                    ``(II) all other applicable 
                                requirements under this section are 
                                met.
                            ``(ii) Different brokers and dealers.--An 
                        issuer or an affiliated purchaser of an issuer 
                        may use 1 broker or dealer to effect a covered 
                        purchase during the period described in clause 
                        (i) that is different from the broker or dealer 
                        that the issuer or affiliated purchaser used 
                        during the primary trading session.
                            ``(iii) Limitation.--A covered purchase 
                        effected during the period described in clause 
                        (i) may be not be the opening transaction of 
                        the session following the close of the primary 
                        trading session.
            ``(3) Price of purchases.--Any covered purchase shall be 
        effected at a purchase price that--
                    ``(A) does not exceed the highest independent bid 
                or the last independent transaction price, whichever is 
                higher, quoted or reported in the consolidated system 
                at the time the covered purchase is effected;
                    ``(B) for securities for which bids and transaction 
                prices are not quoted or reported in the consolidated 
                system, does not exceed the highest independent bid or 
                the last independent transaction price, whichever is 
                higher, displayed and disseminated on any national 
                securities exchange or on any interdealer quotation 
                system, as defined in section 240.15c2-11 of title 17, 
                Code of Federal Regulations (or any successor 
                regulation), that displays not less than 2 priced 
                quotations for the security, at the time the covered 
                purchase is effected; and
                    ``(C) for any other security not described in 
                subparagraph (B), is not higher than the highest 
                independent bid obtained from 3 independent dealers.
            ``(4) Volume of purchases.--The total volume of covered 
        purchases effected by or for an issuer and any affiliated 
        purchaser of the issuer on any single day shall not exceed 15 
        percent of the average daily trading volume reported for that 
        security during the 4 calendar weeks preceding the week in 
        which the covered purchase is to be effected.
            ``(5) Alternative conditions.--The conditions of paragraphs 
        (1) through (4) shall apply in connection with a covered 
        purchase effected during a trading session following the 
        imposition of a market-wide trading suspension, except that--
                    ``(A) the time of covered purchases condition under 
                paragraph (2) shall not apply either--
                            ``(i) from the reopening of trading until 
                        the scheduled close of trading on the date on 
                        which that suspension is imposed; or
                            ``(ii) at the opening of trading on the 
                        next trading day until the scheduled close of 
                        trading that day, if a market-wide trading 
                        suspension was in effect at the close of 
                        trading on the preceding day; and
                    ``(B) the volume of covered purchases condition 
                under paragraph (4) shall be modified so that the 
                amount of covered purchases may not exceed 100 percent 
                of the average daily trading volume for that security.
    ``(e) Prohibition on Sales by Executive Officers.--
            ``(1) In general.--Except as provided in paragraph (2), 
        upon the announcement by an issuer of the initiation, 
        continuation, or increase in size of a repurchase plan for the 
        common stock of the issuer, an executive officer of the issuer 
        may not sell shares of the common stock of the issuer during 
        the 7-day period beginning on the date of the announcement.
            ``(2) Exception.--An executive officer of an issuer may 
        sell shares of the common stock of the issuer during the 7-day 
        period described in paragraph (1) if the sale of the shares 
        involves a sale of common stock that satisfies the conditions 
        under section 240.10b5-1(c) of title 17, Code of Federal 
        Regulations, or any successor regulation.
    ``(f) Additional Regulation.--The Commission may, by rule, 
establish further disclosures, conditions, or requirements to increase 
the information provided by issuers with respect to repurchases of 
common stock.''.
    (c) Form 8-K.--Not later than 1 year after the date of enactment of 
this Act, the Securities and Exchange Commission (referred to in this 
section as the ``Commission'') shall revise the form described in 
section 249.308 of title 17, Code of Federal Regulations, or any 
successor regulation (commonly known as ``Form 8-K''), to require the 
disclosure of the information described in section 9A(c) of the 
Securities Exchange Act of 1934, as added by subsection (b).
    (d) Study.--Not later than 1 year after the date of enactment of 
this Act, the Commission shall submit to Congress--
            (1) the results of a study conducted by the Commission 
        regarding the impact of this section, and the amendments made 
        by this section, on thinly traded securities; and
            (2) recommendations regarding any changes to paragraph (4) 
        of section 9A(d) of the Securities Exchange Act of 1934, as 
        added by subsection (b) of this section, that the Commission 
        determines to be necessary.

SEC. 4. WORKER DIVIDEND.

    (a) Definitions.--In this section--
            (1) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (2) the term ``covered issuer''--
                    (A) means an issuer, a class of equity securities 
                of which is registered pursuant to section 12 of the 
                Securities Exchange Act of 1934 (15 U.S.C. 78l); and
                    (B) includes a consolidated subsidiary of an issuer 
                described in subparagraph (A);
            (3) the term ``eligible worker'', with respect to a covered 
        issuer, means a worker with respect to the covered issuer who, 
        in a fiscal year--
                    (A) performs services for the covered issuer for 
                not fewer than 30 days;
                    (B) as part of carrying out a contract described in 
                paragraph (10)(A)(iv)(I)(cc), performs services or 
                provides goods pursuant to that contract for not fewer 
                than 30 days; or
                    (C) performs services for an employer described in 
                paragraph (10)(A)(v) for not fewer than 30 days;
            (4) the terms ``employ'', ``employee'', ``employer'', and 
        ``goods'' have the meanings given those terms in section 3 of 
        the Fair Labor Standards Act of 1938 (29 U.S.C. 203);
            (5) the terms ``exchange'' and ``issuer'' have the meanings 
        given those terms in section 3(a) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a));
            (6) the term ``executive officer'', with respect to a 
        covered issuer, means--
                    (A) the president of the covered issuer;
                    (B) any vice president of the covered issuer who is 
                in charge of a principal business unit, division, or 
                function of the covered issuer, such as sales, 
                administration, or finance;
                    (C) any other officer of the covered issuer who 
                performs a policymaking function for the covered 
                issuer; and
                    (D) any other individual who performs a similar 
                policymaking function to that described in subparagraph 
                (C);
            (7) the term ``Form 10-K'' means the form described in 
        section 249.310 of title 17, Code of Federal Regulations, or 
        any successor regulation;
            (8) the term ``Form 10-Q'' means the form described in 
        section 249.308a of title 17, Code of Federal Regulations, or 
        any successor regulation;
            (9) the terms ``franchisee'' and ``franchisor'' have the 
        meanings given those terms in section 436.1 of title 16, Code 
        of Federal Regulations, as in effect on the date of enactment 
        of this Act; and
            (10) the term ``worker''--
                    (A) means, with respect to a covered issuer--
                            (i) an employee who is employed by the 
                        covered issuer;
                            (ii) an individual, other than an employee 
                        described in clause (i), who is engaged by the 
                        covered issuer to perform services, including 
                        by working as an independent contractor, 
                        without regard to--
                                    (I) the label or classification 
                                assigned to the individual, or used to 
                                refer to the individual, by the covered 
                                issuer; and
                                    (II) whether the individual has 
                                established, and is the sole owner of, 
                                a single-member limited liability 
                                company;
                            (iii) an employee who is--
                                    (I) employed by an employer--
                                            (aa) other than the covered 
                                        issuer; and
                                            (bb) that is privately 
                                        held; and
                                    (II) supplied by the employer 
                                described in subclause (I) to perform 
                                services for the covered issuer;
                            (iv) an employee who--
                                    (I) is employed by an employer--
                                            (aa) other than the covered 
                                        issuer;
                                            (bb) that is privately 
                                        held; and
                                            (cc) with which the covered 
                                        issuer enters into a contract, 
                                        under which that employer 
                                        performs services for, or 
                                        provides goods to, the covered 
                                        issuer; and
                                    (II) performs services or provides 
                                goods pursuant to the contract 
                                described in subclause (I)(cc); and
                            (v) an employee who is employed by an 
                        employer--
                                    (I) other than the covered issuer;
                                    (II) that is privately held; and
                                    (III) that has a relationship or 
                                arrangement with the covered issuer 
                                such that the employer is a franchisee 
                                and the covered issuer is a franchisor; 
                                and
                    (B) does not include an executive officer of a 
                covered issuer.
    (b) Requirements.--
            (1) Calculation of worker dividend.--For the purposes of 
        the requirements of this section, for a fiscal year (referred 
        to in this section as the ``covered year''), the payment 
        described in paragraph (3)(A) shall be calculated as follows:
                    (A) Adding the following amounts:
                            (i) In that covered year, the total amount 
                        spent by the covered issuer on the purchase of 
                        common stock (or an equivalent interest, 
                        including a unit of beneficial interest in a 
                        trust or limited partnership or a depository 
                        share) of the covered issuer, without regard to 
                        the means or method used by the covered issuer 
                        to effect that purchase.
                            (ii) The total amount of any increase in 
                        ordinary dividends declared and paid by the 
                        covered issuer in the covered year with respect 
                        to the common stock of the covered issuer, as 
                        compared with that amount in the fiscal year 
                        preceding the covered year.
                            (iii) The total amount spent by the covered 
                        issuer in the covered year on special or 1-time 
                        dividends with respect to the common stock of 
                        the covered issuer.
                    (B) Dividing the sum obtained under subparagraph 
                (A) by 1,000,000.
            (2) Reporting.--Each covered issuer shall--
                    (A) in each Form 10-K submitted by the covered 
                issuer, disclose, with respect to the covered year to 
                which the submission applies--
                            (i) each component of the calculation 
                        described in paragraph (1), and the total 
                        amount of that calculation, if that calculation 
                        results in an amount that is greater than zero; 
                        and
                            (ii) the number of eligible workers with 
                        respect to the covered issuer, which the 
                        covered issuer shall identify by type of worker 
                        and employer; and
                    (B) not later than 30 days after the last day of a 
                covered year, provide to each worker with respect to 
                the covered issuer a document, in physical or 
                electronic form, that discloses the number of hours 
                that the worker worked during the covered year.
            (3) Payment and verification.--
                    (A) In general.--Not later than the last day of the 
                first fiscal quarter that begins after the end of a 
                covered year, if the calculation under paragraph (1) 
                with respect to that covered year results in an amount 
                that is greater than zero, each covered issuer shall 
                issue to each eligible worker with respect to the 
                covered issuer for that covered year a cash payment as 
                follows:
                            (i) An eligible worker who was employed, or 
                        otherwise engaged, to perform services for the 
                        covered issuer, perform services or provide 
                        goods pursuant to a contract described in 
                        subsection (a)(10)(A)(iv)(I)(cc), or perform 
                        services for an employer described in 
                        subsection (a)(10)(A)(v) for fewer than 520 
                        hours during the covered year shall receive 25 
                        percent of the amount calculated under 
                        paragraph (1).
                            (ii) An eligible worker who was employed, 
                        or otherwise engaged, to perform services for 
                        the covered issuer, perform services or provide 
                        goods pursuant to a contract described in 
                        subsection (a)(10)(A)(iv)(I)(cc), or perform 
                        services for an employer described in 
                        subsection (a)(10)(A)(v) for not fewer than 520 
                        hours and fewer than 1,040 hours during the 
                        covered year shall receive 50 percent of the 
                        amount calculated under paragraph (1).
                            (iii) An eligible worker who was employed, 
                        or otherwise engaged, to perform services for 
                        the covered issuer, perform services or provide 
                        goods pursuant to a contract described in 
                        subsection (a)(10)(A)(iv)(I)(cc), or perform 
                        services for an employer described in 
                        subsection (a)(10)(A)(v) for not fewer than 
                        1,040 hours and fewer than 1,560 hours during 
                        the covered year shall receive 75 percent of 
                        the amount calculated under paragraph (1).
                            (iv) An eligible worker who was employed, 
                        or otherwise engaged, to perform services for 
                        the covered issuer, perform services or provide 
                        goods pursuant to a contract described in 
                        subsection (a)(10)(A)(iv)(I)(cc), or perform 
                        services for an employer described in 
                        subsection (a)(10)(A)(v) for not fewer than 
                        1,560 hours during the covered year shall 
                        receive 100 percent of the amount calculated 
                        under paragraph (1).
                    (B) Form 10-q.--Each covered issuer that is 
                required to issue payments under subparagraph (A) with 
                respect to a covered year shall certify, in the first 
                Form 10-Q submitted by the covered issuer after the 
                date on which the covered issuer is required to make 
                the payments, that the covered issuer made the 
                payments.
                    (C) Inability to make payments.--If a covered 
                issuer is required to issue a payment under 
                subparagraph (A) and is unable to issue the payment 
                because the individual to whom the payment relates is, 
                as of the date on which the payment is due, no longer a 
                worker with respect to the covered issuer, the covered 
                issuer shall--
                            (i) in a manner that the Commission shall, 
                        by rule, establish, deposit in an escrow 
                        account the amount of the required payment; and
                            (ii) in the submission under subparagraph 
                        (B) to which the payment relates, describe the 
                        efforts of the covered issuer to issue the 
                        payment.
    (c) Enforcement.--With respect to a covered issuer that is required 
to issue the payments described in subsection (b)(3)(A) and fails to 
issue those payments--
            (1) the covered issuer--
                    (A) for the 5-year period beginning on the date on 
                which the covered issuer was required to issue the 
                payments, may not make a purchase to which section 9A 
                of the Securities Exchange Act of 1934, as added by 
                section 3(b) of this Act, applies, except to account 
                for common stock that is issuable under an employee 
                stock or option award in any such year; and
                    (B) for each of the first 5 fiscal years after the 
                covered year with respect to which the covered issuer 
                was required to issue the payments, shall issue those 
                payments in the amount required with respect to the 
                covered year; and
            (2) the Commission may, in accordance with applicable laws 
        and regulations, bring an enforcement action against the 
        covered issuer.
    (d) Protections for Workers.--
            (1) Prohibition.--No covered issuer may discharge or in any 
        manner discriminate against any worker with respect to the 
        covered issuer with respect to the compensation, terms, 
        conditions, or other privileges of employment of the worker 
        because the worker is eligible to receive a payment from the 
        covered issuer under subsection (b)(3)(A).
            (2) Private right of action.--
                    (A) In general.--Any covered issuer that fails to 
                issue a payment to a worker with respect to the covered 
                issuer that is required under subsection (b)(3)(A) 
                shall be liable to that worker in the amount of that 
                payment and in an additional amount as liquidated 
                damages.
                    (B) Jurisdiction.--An action to recover the 
                liability described in subparagraph (A) may be 
                maintained against a covered issuer described in that 
                subparagraph in any Federal or State court of competent 
                jurisdiction by any 1 or more workers described in that 
                subparagraph for and on behalf of that worker or 
                workers and other workers similarly situated, except 
                that no worker shall be a party plaintiff to any such 
                action unless the worker gives consent to become such a 
                party and that consent is filed in the court in which 
                the action is brought.
                    (C) Attorney's fees.--The court in which an action 
                is brought under subparagraph (B) shall, in addition to 
                any judgment awarded to the plaintiff or plaintiffs in 
                the action, allow a reasonable attorney's fee to be 
                paid by the defendant and the costs of the action.
                    (D) Arbitration.--Notwithstanding any other Federal 
                or State law, rule, or regulation, any agreement to 
                arbitrate any dispute involving a covered issuer and a 
                worker with respect to the covered issuer shall not 
                apply with respect to the right of the worker to bring 
                an action under this paragraph.
    (e) Rules of Construction.--
            (1) In general.--Nothing in this section may be construed 
        to--
                    (A) supersede any provision in any collective 
                bargaining agreement to which a covered issuer is a 
                party; or
                    (B) prevent an individual from receiving multiple 
                payments under subsection (b)(3)(A) for a covered year 
                if the individual is an eligible worker with respect to 
                more than 1 covered issuer in that covered year.
            (2) Other profit-sharing agreements.--No other profit-
        sharing agreement between a covered issuer and any worker with 
        respect to the covered issuer, other than as specifically 
        described in this section, may be construed to satisfy the 
        requirements of this section.

SEC. 5. COMMISSION REQUIREMENTS.

    (a) Definition.--In this section, the term ``Regulation S-K'' means 
part 229 of title 17, Code of Federal Regulations, or any successor 
regulations.
    (b) Updates.--Not later than 1 year after the date of enactment of 
this Act, the Securities and Exchange Commission shall make any updates 
to Regulation S-K that are required as a result of this Act and the 
amendments made by this Act.
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