The Workforce Investment Disclosure Act of 2021 in its current form seeks to rectify these issues by providing organizational reporting on demographics, compensation, recruiting, and other policies and procedures to reduce discrimination and increase employee job satisfaction, performance, and engagement.
The Act amends the Securities Exchange Act of 1934, which requires issuers to disclose to the Securities and Exchange Commission (“SEC”) information regarding workforce management policies, practices, and performance. The Act would strongly align with the SEC’s recent steps to review disclosures related to organizations’ environmental, societal, and governance (ESG) criteria.
If signed into law, the Workforce Investment Disclosure Act of 2021 would require public companies to file an annual report disclosing information regarding workforce management policies, practices, and performance with respect to the issuer no later than two years after the enactment date. The SEC may exempt emerging growth companies from certain disclosures.
Workforce demographic information, including the number of full-time employees, part-time employees, contingent workers, (such as temporary and contract workers), and their demographic information. Policies or practices relating to subcontracting, outsourcing, and insourcing individuals. Whether the percentage of contingent workers has changed as compared with the previous annual report.
Workforce stability information, including the voluntary and involuntary turnover or retention rate, internal hiring rate, internal promotion rate, and the horizontal job change rate.
Workforce composition, such as data on diversity (racial, ethnic, gender) and policies, audits, and programming expenditure related to diversity.
Workforce skills and capabilities, such as employee training and development, including the total and average amount of time spent.
Workforce health, safety, and wellbeing, including any policies and practices aimed at supporting employee wellness. Data shows that organizations that prioritize employee wellness, health, and safety see greater financial performance.
Workforce compensation and incentives, including total workforce costs (salaries, wages, health care benefits), workforce benefits, total contributions made to unemployment insurance, policies and practices regarding how performance, productivity, equity, and sustainability are considered when setting pay and making promotion decisions; policies and practices relating to any incentives and bonuses provided to employees.
Workforce recruiting, such as the number of new jobs created and jobs seeking to be filled based on classification status, the share of new jobs that require a bachelor’s degree or higher, information regarding the quality of hire for jobs, and retention rate for individuals hired to fill the jobs.
Workforce engagement and productivity, including information regarding policies and practices related to engagement, productivity, and mental well-being of employees and contingent workers as well as freedom of association and work-life balance initiatives, including flexibility and the ability of the workforce to work remotely.
It is unlawful to file untrue statements or omit material facts within the report.
Employers should note that the Act does not create a private right of action, meaning a private citizen cannot legally enforce rights based on the Act.
Employers that wish to prepare for the Act’s reporting regime should consider taking a proactive approach and can do so by developing a holistic DEI program. With a software solution like PayParity, you can bolster your efforts to enhance workplace equity and achieve DEI goals like those outlined in the Workforce Investment Disclosure Act.
PayParity analyzes employee compensation at the intersections of gender, race/ethnicity to identify pay disparities that cannot be explained by legitimate business reasons, such as tenure, experience, and education. This proactive approach will ensure fairness of compensation in the workplace, increase employee retention, and reduce legal liability.
Pay equity is at the intersectionality of fairness, transparency, and trust with regard to employee compensation. PayParity provides organizations with an accurate, reliable depiction of their organization’s pay equity status so that they can confidently tailor their disclosures to employees, government agencies, and stakeholders that they are a fair-pay workplace. When employers are transparent and fair to their employees it fosters trust.
If you’re interested in learning more about how to implement a DEI comprehensive program, download the research report we recently sponsored, Creating a Culture of Diversity, Equity, and Inclusion, conducted by Harvard Business Review.
With pressure mounting for organizations to prove they foster diverse, equitable, and inclusive workforces, employers must commit to prioritizing workplace equity. Our research report, Creating a Culture of Diversity, Equity, and Inclusion, details how organizations can ensure their successful with their efforts. Download it now to learn more.