II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stock Buyback Reform 

5 and Worker Dividend Act of 2019’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Over the last several decades— 


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1 (A) the volume and value of stock 

2 buybacks have increased significantly, with par3 ticularly large increases occurring in the 15 

4 years preceding the date of enactment of this 

5 Act; and 

6 (B) the wealth gap in the United States 

7 has widened drastically, as corporate profits 

8 and executive compensation have skyrocketed, 

9 but, for workers, salaries and wages have barely 

10 increased and purchasing power has remained 

11 the same. 

12 (2) Between 2004 and 2013, some of the larg13 est companies in the United States spent at least 

14 100 percent of their net income on stock buybacks 

15 and, between 2010 and 2017, companies in the 

16 United States spent more than $3,000,000,000,000 

17 on those buybacks. After the enactment of changes 

18 to the tax laws of the United States in December 

19 2017, companies in the United States further in20 creased stock buyback activity. 

21 (3) In 2018— 

22 (A) companies listed in the S&P 500 index 

23 spent $806,400,000,000 purchasing their own 

24 stock, an amount that is 55 percent higher than 


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1 in 2017 and 36 percent higher than in 2007, 

2 the year that— 

3 (i) had previously held the record for 

4 the largest total buyback amount; and 

5 (ii) marked the beginning of the most 

6 significant financial crisis since the Great 

7 Depression; and 

8 (B) companies spent more money on stock 

9 buybacks than on debt payments, capital ex10 penditures, research and development, or divi11 dends. 

12 (4) Stock buybacks benefit large shareholders 

13 and corporate executives, the pay packages of whom 

14 include significant stock compensation. Those 

15 buybacks can also increase the earnings per share 

for a company and nearly 1 16 ⁄2 of the companies listed 

17 in the S&P 500 index link executive compensation to 

18 earnings per share. 

19 (5) Compared to the typical worker, the com20 pensation for a chief executive officer (referred to in 

21 this paragraph as a ‘‘CEO’’) has increased signifi22 cantly. In 1989, the ratio of CEO-to-worker com23 pensation was 58 to 1, but, in 2017, that ratio was 

24 312 to 1. Over roughly the same period of time, the 

25 wealth gap in the United States has widened considVerDate Sep 11 2014 00:55 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2391.IS S2391

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1 erably. Between 1989 and 2016, the share of wealth 

2 in the United States held by the top 1 percent of in3 dividuals in the United States with respect to annual 

4 income increased from just below 30 percent to 

5 nearly 39 percent, while the share of wealth held by 

6 the bottom 90 percent of individuals in the United 

7 States with respect to annual income dropped from 

8 slightly more than 33 percent to less than 23 per9 cent. 

10 (6) Since 2000, corporate profits, as a percent11 age of total income in the United States, have in12 creased by nearly 5 percentage points while workers’ 

13 salaries, as a percentage of that total income, have 

14 decreased by 4 percentage points. 

15 (7) The economic strength of the United States 

16 is undermined by the wealth gap described in this 

17 section. According to the Organisation for Economic 

18 Co-operation and Development, increasing income 

19 inequality in the United States between 1990 and 

20 2010 reduced the per capita gross domestic product 

21 of the United States by approximately 5 percentage 

22 points. 

23 (8) Left unaddressed, the patterns of corporate 

24 excess and growing wealth inequality described in 

25 this section will worsen and workers will continue to 


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1 contribute to corporate profits without sharing in 

2 those profits. 

3 SEC. 3. REPURCHASE OF COMMON STOCK. 

4 (a) REPEAL OF SAFE HARBOR.—Section 240.10b–18 

5 of title 17, Code of Federal Regulations, shall have no 

6 force or effect. 

7 (b) DISCLOSURE AND OTHER REQUIREMENTS.—The 

8 Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

9 is amended by inserting after section 9 (15 U.S.C. 78i) 

10 the following: 

11 ‘‘SEC. 9A. ISSUER COMMON STOCK REPURCHASES. 

12 ‘‘(a) DEFINITIONS.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), in this section, the definitions of terms in 

15 section 240.10b–18(a) of title 17, Code of Federal 

16 Regulations, as in effect on the day before the date 

17 of enactment of this section, shall apply to any such 

18 term that appears in this section. 

19 ‘‘(2) COVERED PURCHASE.—The term ‘covered 

20 purchase’— 

21 ‘‘(A) means a purchase (or any bid or limit 

22 order that would effect such purchase) of the 

23 common stock of an issuer (or an equivalent in24 terest, including a unit of beneficial interest in 

25 a trust or limited partnership or a depository 


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1 share) by or for the issuer or any affiliated pur2 chaser (including riskless principal trans3 actions); 

4 ‘‘(B) includes a purchase described in sub5 paragraph (A) that is effected during a trans6 action described in subparagraph (C)(iv) in 

7 which the consideration is solely cash and there 

8 is no valuation period; and 

9 ‘‘(C) does not include a purchase described 

10 in subparagraph (A) that is effected— 

11 ‘‘(i) during the applicable restricted 

12 period of a distribution that is subject to 

13 section 242.102 of title 17, Code of Fed14 eral Regulations, or any successor regula15 tion; 

16 ‘‘(ii) by or for an issuer plan by an 

17 agent independent of the issuer; 

18 ‘‘(iii) as a fractional share purchase (a 

19 fractional interest in a security) evidenced 

20 by a script certificate, order form, or simi21 lar document; 

22 ‘‘(iv) during the period from the time 

23 of public announcement, as defined in sec24 tion 230.165(f) of title 17, Code of Federal 

25 Regulations, or any successor regulation, 


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1 of a merger, acquisition, or similar trans2 action involving a recapitalization, until the 

3 earlier of the completion of that trans4 action or the completion of the vote by tar5 get shareholders; 

6 ‘‘(v) pursuant to section 240.13e–1 of 

7 title 17, Code of Federal Regulations, or 

8 any successor regulation; 

9 ‘‘(vi) pursuant to a tender offer that 

10 is subject to or specifically excepted from 

11 section 240.13e–4 of title 17, Code of Reg12 ulations, or any successor regulation; or 

13 ‘‘(vii) pursuant to a tender offer that 

14 is subject to section 14(d), and any rules 

15 or regulations prescribed by the Commis16 sion relating to that section. 

17 ‘‘(b) REQUIREMENT.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), it shall be unlawful as a fraudulent, de20 ceptive, or manipulative act or practice under section 

21 9(a)(2) or 10(b) of this Act or section 240.10b–5 of 

22 title 17, Code of Federal Regulations, or any suc23 cessor regulation, for an issuer or affiliated pur24 chaser of the issuer to effect a repurchase of the 

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1 filiated purchaser, as applicable, complies with the 

2 requirements under this section. 

3 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not 

4 apply— 

5 ‘‘(A) to an issuer or affiliated purchaser of 

6 an issuer if— 

7 ‘‘(i) a violation of the requirements 

8 under this section occurred solely by rea9 son of the conduct of a broker, dealer, or 

10 other person acting for the issuer or affili11 ated purchaser; 

12 ‘‘(ii) the issuer or affiliated purchaser 

13 did not know or have reason to know that 

14 the broker, dealer, or other person was en15 gaging or would engage in that conduct; 

16 and 

17 ‘‘(iii) the issuer or affiliated purchaser 

18 had taken reasonable steps to ensure that 

19 the broker, dealer, or other person would 

20 comply with the requirements under this 

21 section; or 

22 ‘‘(B) to a broker, dealer, or other person 

23 acting for an issuer or affiliated purchaser of 

24 the issuer if— 


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1 ‘‘(i) a violation of the requirements 

2 under this section occurred solely by rea3 son of the conduct of the issuer or affili4 ated purchaser; and 

5 ‘‘(ii) the broker, dealer, or other per6 son did not know or have reason to know 

7 that the issuer or affiliated purchaser was 

8 engaging or would engage in conduct that 

9 would violate the requirements under this 

10 section. 

11 ‘‘(c) DISCLOSURE.— 

12 ‘‘(1) IN GENERAL.—Any issuer or affiliated 

13 purchaser of the issuer that seeks to effect a plan 

14 or program to repurchase common stock of the 

15 issuer shall, on or before the date on which the 

16 issuer or affiliated purchaser begins repurchasing 

17 common stock under the plan or program, disclose 

18 to the Commission on a Form 8–K a filing that in19 cludes— 

20 ‘‘(A) the economic rationale, long-term 

21 benefits, and reason for the repurchase; 

22 ‘‘(B) the minimum and maximum number 

23 (if any) of shares of common stock to be repur24 chased, and the dollar value to be spent, under 

25 the plan or program; 


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1 ‘‘(C) the manner and method of repur2 chase, including any price guidelines or limita3 tions, or contractual plan or arrangement; 

4 ‘‘(D) the intended disposition or treatment 

5 of the repurchased common stock; 

6 ‘‘(E) whether any executive officer of the 

7 issuer or affiliated purchaser is purchasing 

8 common stock during the pendency of the re9 purchase; 

10 ‘‘(F) whether any executive officer of the 

11 issuer or affiliated purchaser is permitted, or 

12 intends, to sell common stock during the pend13 ency of the repurchase; 

14 ‘‘(G) a summary of any communications 

15 between the issuer and any holders of common 

16 stock of the issuer regarding the scope and im17 plementation of the plan or program; and 

18 ‘‘(H) the source of funds for the repur19 chase, specifying if any debt will be incurred by 

20 the issuer or affiliated purchaser. 

21 ‘‘(2) WEEKLY DISCLOSURE.— 

22 ‘‘(A) IN GENERAL.—In addition to the re23 quirement under paragraph (1), each issuer 

24 that effects a repurchase of common stock of 

25 the issuer in any calendar week shall, not later 


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1 than the last business day of the following 

2 week, file with the Commission a public disclo3 sure filing (in such form and manner as the 

4 Commission shall, by rule, establish) that iden5 tifies— 

6 ‘‘(i) the number of shares of common 

7 stock of the issuer that the issuer repur8 chased; 

9 ‘‘(ii) the average price paid per share 

10 during the week covered by the filing; and 

11 ‘‘(iii) the identity of any broker-dealer 

12 that effected the purchase during the week 

13 covered by the filing. 

14 ‘‘(B) NO REPURCHASE.—An issuer shall 

15 not be required to submit a filing under sub16 paragraph (A) with respect to any calendar 

17 week in which the issuer does not repurchase 

18 the common stock of the issuer. 

19 ‘‘(3) DEFINITION.—In this subsection, the term 

20 ‘executive officer’ has the meaning given the term in 

21 section 240.3b–7 of title 17, Code of Federal Regu22 lations, as in effect on the day before the date of en23 actment of this section. 

24 ‘‘(d) PURCHASING REQUIREMENTS.— 

25 ‘‘(1) ONE BROKER OR DEALER.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B) and paragraph (2)(B)(ii), a 

3 covered purchase shall be effected from or 

4 through only 1 broker or dealer on any single 

5 day. 

6 ‘‘(B) EXCEPTION.—Subparagraph (A) 

7 shall not apply to a covered purchase that is 

8 not solicited by or on behalf of an issuer or an 

9 affiliated purchaser of the issuer. 

10 ‘‘(C) SAME BROKER OR DEALER.—If a 

11 covered purchase is effected by or on behalf of 

12 not less than 1 affiliated purchaser of an issuer 

13 (or the issuer and not less than 1 of the affili14 ated purchasers of the issuer) on a single day, 

15 the issuer and all affiliated purchasers shall use 

16 the same broker or dealer. 

17 ‘‘(D) LIMITED ACCESS TO LIQUIDITY.—If 

18 a covered purchase is effected on behalf of an 

19 issuer by a broker-dealer that is not an elec20 tronic communication network or other alter21 native trading system, that broker-dealer can 

22 access electronic communication network or 

23 other alternative trading system liquidity in 

24 order to execute a repurchase of common stock 


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1 on behalf of the issuer or any affiliated pur2 chaser of the issuer on that day. 

3 ‘‘(2) TIME OF PURCHASES.— 

4 ‘‘(A) IN GENERAL.—A covered purchase 

5 effected by an issuer or an affiliated purchaser 

6 of an issuer shall not be— 

7 ‘‘(i) the opening (regular way) pur8 chase reported in the consolidated system; 

9 ‘‘(ii) except as provided in subpara10 graph (B), effected during the 10 minutes 

11 before the scheduled close of the primary 

12 trading session in the principal market for 

13 the security, and the 10 minutes before the 

14 scheduled close of the primary trading ses15 sion in the market where the purchase is 

16 effected, for a security that has an average 

17 daily trading volume reported for that se18 curity during the 4 calendar weeks pre19 ceding the week in which the purchase is 

20 to be effected of not less than $1,000,000 

21 and a public float value of not less than 

22 $150,000,000; or 

23 ‘‘(iii) effected during the 30 minutes 

24 before the scheduled close of the primary 

25 trading session in the principal market for 


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1 the security, and the 30 minutes before the 

2 scheduled close of the primary trading ses3 sion in the market where the purchase is 

4 effected, for all other securities. 

5 ‘‘(B) PURCHASE FOLLOWING CLOSE OF

6 PRIMARY TRADING SESSION.— 

7 ‘‘(i) IN GENERAL.—A covered pur8 chase may be effected following the close of 

9 the primary trading session until the ter10 mination of the period in which last sale 

11 prices are reported in the consolidated sys12 tem if— 

13 ‘‘(I) the covered purchase is ef14 fected at a price that does not exceed 

15 the lower of— 

16 ‘‘(aa) the closing price of the 

17 primary trading session in the 

18 principal market for the security; 

19 or 

20 ‘‘(bb) any lower bids or sale 

21 prices subsequently reported in 

22 the consolidated system; and 

23 ‘‘(II) all other applicable require24 ments under this section are met. 


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1 ‘‘(ii) DIFFERENT BROKERS AND

2 DEALERS.—An issuer or an affiliated pur3 chaser of an issuer may use 1 broker or 

4 dealer to effect a covered purchase during 

5 the period described in clause (i) that is 

6 different from the broker or dealer that the 

7 issuer or affiliated purchaser used during 

8 the primary trading session. 

9 ‘‘(iii) LIMITATION.—A covered pur10 chase effected during the period described 

11 in clause (i) may be not be the opening 

12 transaction of the session following the 

13 close of the primary trading session. 

14 ‘‘(3) PRICE OF PURCHASES.—Any covered pur15 chase shall be effected at a purchase price that— 

16 ‘‘(A) does not exceed the highest inde17 pendent bid or the last independent transaction 

18 price, whichever is higher, quoted or reported in 

19 the consolidated system at the time the covered 

20 purchase is effected; 

21 ‘‘(B) for securities for which bids and 

22 transaction prices are not quoted or reported in 

23 the consolidated system, does not exceed the 

24 highest independent bid or the last independent 

25 transaction price, whichever is higher, displayed 


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1 and disseminated on any national securities ex2 change or on any interdealer quotation system, 

3 as defined in section 240.15c2–11 of title 17, 

4 Code of Federal Regulations (or any successor 

5 regulation), that displays not less than 2 priced 

6 quotations for the security, at the time the cov7 ered purchase is effected; and 

8 ‘‘(C) for any other security not described 

9 in subparagraph (B), is not higher than the 

10 highest independent bid obtained from 3 inde11 pendent dealers. 

12 ‘‘(4) VOLUME OF PURCHASES.—The total vol13 ume of covered purchases effected by or for an 

14 issuer and any affiliated purchaser of the issuer on 

15 any single day shall not exceed 15 percent of the av16 erage daily trading volume reported for that security 

17 during the 4 calendar weeks preceding the week in 

18 which the covered purchase is to be effected. 

19 ‘‘(5) ALTERNATIVE CONDITIONS.—The condi20 tions of paragraphs (1) through (4) shall apply in 

21 connection with a covered purchase effected during 

22 a trading session following the imposition of a mar23 ket-wide trading suspension, except that— 


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1 ‘‘(A) the time of covered purchases condi2 tion under paragraph (2) shall not apply ei3 ther— 

4 ‘‘(i) from the reopening of trading 

5 until the scheduled close of trading on the 

6 date on which that suspension is imposed; 

7 or 

8 ‘‘(ii) at the opening of trading on the 

9 next trading day until the scheduled close 

10 of trading that day, if a market-wide trad11 ing suspension was in effect at the close of 

12 trading on the preceding day; and 

13 ‘‘(B) the volume of covered purchases con14 dition under paragraph (4) shall be modified so 

15 that the amount of covered purchases may not 

16 exceed 100 percent of the average daily trading 

17 volume for that security. 

18 ‘‘(e) PROHIBITION ON SALES BY EXECUTIVE OFFI19 CERS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), upon the announcement by an issuer of 

22 the initiation, continuation, or increase in size of a 

23 repurchase plan for the common stock of the issuer, 

24 an executive officer of the issuer may not sell shares 


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1 of the common stock of the issuer during the 7-day 

2 period beginning on the date of the announcement. 

3 ‘‘(2) EXCEPTION.—An executive officer of an 

4 issuer may sell shares of the common stock of the 

5 issuer during the 7-day period described in para6 graph (1) if the sale of the shares involves a sale of 

7 common stock that satisfies the conditions under 

8 section 240.10b5–1(c) of title 17, Code of Federal 

9 Regulations, or any successor regulation. 

10 ‘‘(f) ADDITIONAL REGULATION.—The Commission 

11 may, by rule, establish further disclosures, conditions, or 

12 requirements to increase the information provided by 

13 issuers with respect to repurchases of common stock.’’. 

14 (c) FORM 8–K.—Not later than 1 year after the date 

15 of enactment of this Act, the Securities and Exchange 

16 Commission (referred to in this section as the ‘‘Commis17 sion’’) shall revise the form described in section 249.308 

18 of title 17, Code of Federal Regulations, or any successor 

19 regulation (commonly known as ‘‘Form 8–K’’), to require 

20 the disclosure of the information described in section 

21 9A(c) of the Securities Exchange Act of 1934, as added 

22 by subsection (b). 

23 (d) STUDY.—Not later than 1 year after the date of 

24 enactment of this Act, the Commission shall submit to 

25 Congress— 


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1 (1) the results of a study conducted by the 

2 Commission regarding the impact of this section, 

3 and the amendments made by this section, on thinly 

4 traded securities; and 

5 (2) recommendations regarding any changes to 

6 paragraph (4) of section 9A(d) of the Securities Ex7 change Act of 1934, as added by subsection (b) of 

8 this section, that the Commission determines to be 

9 necessary. 

10 SEC. 4. WORKER DIVIDEND. 

11 (a) DEFINITIONS.—In this section— 

12 (1) the term ‘‘Commission’’ means the Securi13 ties and Exchange Commission; 

14 (2) the term ‘‘covered issuer’’— 

15 (A) means an issuer, a class of equity se16 curities of which is registered pursuant to sec17 tion 12 of the Securities Exchange Act of 1934 

18 (15 U.S.C. 78l); and 

19 (B) includes a consolidated subsidiary of 

20 an issuer described in subparagraph (A); 

21 (3) the term ‘‘eligible worker’’, with respect to 

22 a covered issuer, means a worker with respect to the 

23 covered issuer who, in a fiscal year— 

24 (A) performs services for the covered 

25 issuer for not fewer than 30 days; 


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1 (B) as part of carrying out a contract de2 scribed in paragraph (10)(A)(iv)(I)(cc), per3 forms services or provides goods pursuant to 

4 that contract for not fewer than 30 days; or 

5 (C) performs services for an employer de6 scribed in paragraph (10)(A)(v) for not fewer 

7 than 30 days; 

8 (4) the terms ‘‘employ’’, ‘‘employee’’, ‘‘em9 ployer’’, and ‘‘goods’’ have the meanings given those 

10 terms in section 3 of the Fair Labor Standards Act 

11 of 1938 (29 U.S.C. 203); 

12 (5) the terms ‘‘exchange’’ and ‘‘issuer’’ have the 

13 meanings given those terms in section 3(a) of the 

14 Securities Exchange Act of 1934 (15 U.S.C. 78c(a)); 

15 (6) the term ‘‘executive officer’’, with respect to 

16 a covered issuer, means— 

17 (A) the president of the covered issuer; 

18 (B) any vice president of the covered issuer 

19 who is in charge of a principal business unit, di20 vision, or function of the covered issuer, such as 

21 sales, administration, or finance; 

22 (C) any other officer of the covered issuer 

23 who performs a policymaking function for the 

24 covered issuer; and 


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1 (D) any other individual who performs a 

2 similar policymaking function to that described 

3 in subparagraph (C); 

4 (7) the term ‘‘Form 10–K’’ means the form de5 scribed in section 249.310 of title 17, Code of Fed6 eral Regulations, or any successor regulation; 

7 (8) the term ‘‘Form 10–Q’’ means the form de8 scribed in section 249.308a of title 17, Code of Fed9 eral Regulations, or any successor regulation; 

10 (9) the terms ‘‘franchisee’’ and ‘‘franchisor’’ 

11 have the meanings given those terms in section 

12 436.1 of title 16, Code of Federal Regulations, as in 

13 effect on the date of enactment of this Act; and 

14 (10) the term ‘‘worker’’— 

15 (A) means, with respect to a covered 

16 issuer— 

17 (i) an employee who is employed by 

18 the covered issuer; 

19 (ii) an individual, other than an em20 ployee described in clause (i), who is en21 gaged by the covered issuer to perform 

22 services, including by working as an inde23 pendent contractor, without regard to— 

24 (I) the label or classification as25 signed to the individual, or used to 


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1 refer to the individual, by the covered 

2 issuer; and 

3 (II) whether the individual has 

4 established, and is the sole owner of, 

5 a single-member limited liability com6 pany; 

7 (iii) an employee who is— 

8 (I) employed by an employer— 

9 (aa) other than the covered 

10 issuer; and 

11 (bb) that is privately held; 

12 and 

13 (II) supplied by the employer de14 scribed in subclause (I) to perform 

15 services for the covered issuer; 

16 (iv) an employee who— 

17 (I) is employed by an employer— 

18 (aa) other than the covered 

19 issuer; 

20 (bb) that is privately held; 

21 and 

22 (cc) with which the covered 

23 issuer enters into a contract, 

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1 forms services for, or provides 

2 goods to, the covered issuer; and 

3 (II) performs services or provides 

4 goods pursuant to the contract de5 scribed in subclause (I)(cc); and 

6 (v) an employee who is employed by 

7 an employer— 

8 (I) other than the covered issuer; 

9 (II) that is privately held; and 

10 (III) that has a relationship or 

11 arrangement with the covered issuer 

12 such that the employer is a franchisee 

13 and the covered issuer is a franchisor; 

14 and 

15 (B) does not include an executive officer of 

16 a covered issuer. 

17 (b) REQUIREMENTS.— 

18 (1) CALCULATION OF WORKER DIVIDEND.—For 

19 the purposes of the requirements of this section, for 

20 a fiscal year (referred to in this section as the ‘‘cov21 ered year’’), the payment described in paragraph 

22 (3)(A) shall be calculated as follows: 

23 (A) Adding the following amounts: 

24 (i) In that covered year, the total 

25 amount spent by the covered issuer on the 


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1 purchase of common stock (or an equiva2 lent interest, including a unit of beneficial 

3 interest in a trust or limited partnership or 

4 a depository share) of the covered issuer, 

5 without regard to the means or method 

6 used by the covered issuer to effect that 

7 purchase. 

8 (ii) The total amount of any increase 

9 in ordinary dividends declared and paid by 

10 the covered issuer in the covered year with 

11 respect to the common stock of the covered 

12 issuer, as compared with that amount in 

13 the fiscal year preceding the covered year. 

14 (iii) The total amount spent by the 

15 covered issuer in the covered year on spe16 cial or 1-time dividends with respect to the 

17 common stock of the covered issuer. 

18 (B) Dividing the sum obtained under sub19 paragraph (A) by 1,000,000. 

20 (2) REPORTING.—Each covered issuer shall— 

21 (A) in each Form 10–K submitted by the 

22 covered issuer, disclose, with respect to the cov23 ered year to which the submission applies— 

24 (i) each component of the calculation 

25 described in paragraph (1), and the total 


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1 amount of that calculation, if that calcula2 tion results in an amount that is greater 

3 than zero; and 

4 (ii) the number of eligible workers 

5 with respect to the covered issuer, which 

6 the covered issuer shall identify by type of 

7 worker and employer; and 

8 (B) not later than 30 days after the last 

9 day of a covered year, provide to each worker 

10 with respect to the covered issuer a document, 

11 in physical or electronic form, that discloses the 

12 number of hours that the worker worked during 

13 the covered year. 

14 (3) PAYMENT AND VERIFICATION.— 

15 (A) IN GENERAL.—Not later than the last 

16 day of the first fiscal quarter that begins after 

17 the end of a covered year, if the calculation 

18 under paragraph (1) with respect to that cov19 ered year results in an amount that is greater 

20 than zero, each covered issuer shall issue to 

21 each eligible worker with respect to the covered 

22 issuer for that covered year a cash payment as 

23 follows: 

24 (i) An eligible worker who was em25 ployed, or otherwise engaged, to perform 


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•S 2391 IS

1 services for the covered issuer, perform 

2 services or provide goods pursuant to a 

3 contract described in subsection 

4 (a)(10)(A)(iv)(I)(cc), or perform services 

5 for an employer described in subsection 

6 (a)(10)(A)(v) for fewer than 520 hours 

7 during the covered year shall receive 25 

8 percent of the amount calculated under 

9 paragraph (1). 

10 (ii) An eligible worker who was em11 ployed, or otherwise engaged, to perform 

12 services for the covered issuer, perform 

13 services or provide goods pursuant to a 

14 contract described in subsection 

15 (a)(10)(A)(iv)(I)(cc), or perform services 

16 for an employer described in subsection 

17 (a)(10)(A)(v) for not fewer than 520 hours 

18 and fewer than 1,040 hours during the 

19 covered year shall receive 50 percent of the 

20 amount calculated under paragraph (1). 

21 (iii) An eligible worker who was em22 ployed, or otherwise engaged, to perform 

23 services for the covered issuer, perform 

24 services or provide goods pursuant to a 

25 contract described in subsection 


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1 (a)(10)(A)(iv)(I)(cc), or perform services 

2 for an employer described in subsection 

3 (a)(10)(A)(v) for not fewer than 1,040 

4 hours and fewer than 1,560 hours during 

5 the covered year shall receive 75 percent of 

6 the amount calculated under paragraph 

7 (1). 

8 (iv) An eligible worker who was em9 ployed, or otherwise engaged, to perform 

10 services for the covered issuer, perform 

11 services or provide goods pursuant to a 

12 contract described in subsection 

13 (a)(10)(A)(iv)(I)(cc), or perform services 

14 for an employer described in subsection 

15 (a)(10)(A)(v) for not fewer than 1,560 

16 hours during the covered year shall receive 

17 100 percent of the amount calculated 

18 under paragraph (1). 

19 (B) FORM 10–Q.—Each covered issuer that 

20 is required to issue payments under subpara21 graph (A) with respect to a covered year shall 

22 certify, in the first Form 10–Q submitted by 

23 the covered issuer after the date on which the 

24 covered issuer is required to make the payVerDate Sep 11 2014 00:55 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S2391.IS S2391

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•S 2391 IS

1 ments, that the covered issuer made the pay2 ments. 

3 (C) INABILITY TO MAKE PAYMENTS.—If a 

4 covered issuer is required to issue a payment 

5 under subparagraph (A) and is unable to issue 

6 the payment because the individual to whom the 

7 payment relates is, as of the date on which the 

8 payment is due, no longer a worker with respect 

9 to the covered issuer, the covered issuer shall— 

10 (i) in a manner that the Commission 

11 shall, by rule, establish, deposit in an es12 crow account the amount of the required 

13 payment; and 

14 (ii) in the submission under subpara15 graph (B) to which the payment relates, 

16 describe the efforts of the covered issuer to 

17 issue the payment. 

18 (c) ENFORCEMENT.—With respect to a covered 

19 issuer that is required to issue the payments described in 

20 subsection (b)(3)(A) and fails to issue those payments— 

21 (1) the covered issuer— 

22 (A) for the 5-year period beginning on the 

23 date on which the covered issuer was required 

24 to issue the payments, may not make a pur25 chase to which section 9A of the Securities ExVerDate Sep 11 2014 00:55 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S2391.IS S2391

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•S 2391 IS

1 change Act of 1934, as added by section 3(b) 

2 of this Act, applies, except to account for com3 mon stock that is issuable under an employee 

4 stock or option award in any such year; and 

5 (B) for each of the first 5 fiscal years after 

6 the covered year with respect to which the cov7 ered issuer was required to issue the payments, 

8 shall issue those payments in the amount re9 quired with respect to the covered year; and 

10 (2) the Commission may, in accordance with 

11 applicable laws and regulations, bring an enforce12 ment action against the covered issuer. 

13 (d) PROTECTIONS FOR WORKERS.— 

14 (1) PROHIBITION.—No covered issuer may dis15 charge or in any manner discriminate against any 

16 worker with respect to the covered issuer with re17 spect to the compensation, terms, conditions, or 

18 other privileges of employment of the worker because 

19 the worker is eligible to receive a payment from the 

20 covered issuer under subsection (b)(3)(A). 

21 (2) PRIVATE RIGHT OF ACTION.— 

22 (A) IN GENERAL.—Any covered issuer that 

23 fails to issue a payment to a worker with re24 spect to the covered issuer that is required 

25 under subsection (b)(3)(A) shall be liable to 


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1 that worker in the amount of that payment and 

2 in an additional amount as liquidated damages. 

3 (B) JURISDICTION.—An action to recover 

4 the liability described in subparagraph (A) may 

5 be maintained against a covered issuer de6 scribed in that subparagraph in any Federal or 

7 State court of competent jurisdiction by any 1 

8 or more workers described in that subparagraph 

9 for and on behalf of that worker or workers and 

10 other workers similarly situated, except that no 

11 worker shall be a party plaintiff to any such ac12 tion unless the worker gives consent to become 

13 such a party and that consent is filed in the 

14 court in which the action is brought. 

15 (C) ATTORNEY’S FEES.—The court in 

16 which an action is brought under subparagraph 

17 (B) shall, in addition to any judgment awarded 

18 to the plaintiff or plaintiffs in the action, allow 

19 a reasonable attorney’s fee to be paid by the de20 fendant and the costs of the action. 

21 (D) ARBITRATION.—Notwithstanding any 

22 other Federal or State law, rule, or regulation, 

23 any agreement to arbitrate any dispute involv24 ing a covered issuer and a worker with respect 

25 to the covered issuer shall not apply with reVerDate Sep 11 2014 00:55 Aug 13, 2019 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S2391.IS S2391

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1 spect to the right of the worker to bring an ac2 tion under this paragraph. 

3 (e) RULES OF CONSTRUCTION.— 

4 (1) IN GENERAL.—Nothing in this section may 

5 be construed to— 

6 (A) supersede any provision in any collec7 tive bargaining agreement to which a covered 

8 issuer is a party; or 

9 (B) prevent an individual from receiving 

10 multiple payments under subsection (b)(3)(A) 

11 for a covered year if the individual is an eligible 

12 worker with respect to more than 1 covered 

13 issuer in that covered year. 

14 (2) OTHER PROFIT-SHARING AGREEMENTS.— 

15 No other profit-sharing agreement between a cov16 ered issuer and any worker with respect to the cov17 ered issuer, other than as specifically described in 

18 this section, may be construed to satisfy the require19 ments of this section. 

20 SEC. 5. COMMISSION REQUIREMENTS. 

21 (a) DEFINITION.—In this section, the term ‘‘Regula22 tion S–K’’ means part 229 of title 17, Code of Federal 

23 Regulations, or any successor regulations. 

24 (b) UPDATES.—Not later than 1 year after the date 

25 of enactment of this Act, the Securities and Exchange 


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1 Commission shall make any updates to Regulation S–K 

2 that are required as a result of this Act and the amend3 ments made by this Act. 

Æ 


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