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Senate to Gensler: Get Those HCM Rules Done

The Chair of the Senate Banking Committee called out SEC Chair Gary Gensler for failing to propose much-anticipated human capital metrics rules in a December open letter. Senators Sherrod Brown and Mark Warner complained that the SEC’s recently released agenda showed HCM disclosures delayed until April 2024, despite the fact that the SEC has had plenty of time to review current HCM disclosures.

Why it matters: The Senate letter reiterated many of the same talking points found in the SEC’s Investor Advisory Committee’s recommendation, which itself was clearly based on the work of the HCM Coalition (with many of the same people involved). The campaign is clear: this group of stakeholders wants full disclosure of full-time, part-time and contingent workers, with compensation and benefits provided for each category.

Why these metrics? The HCM Coalition has been very successful in convincing lawmakers and regulators that human capital metrics can be used as a proxy for a company’s health and (for lack of a better term) moral worth. As Senator Brown put it, “Investors deserve transparency about whether corporations choose to invest in their people, or rely on underpaid contingent workers in pursuit of quick profits. Short-term thinking hinders workforce investment, increases rates of turnover, and negatively impacts long-term productivity.”

Bottom line: The SEC is under tremendous pressure to finalize rules that please Democratic stakeholders while avoiding lawsuits. The Center will be devoting considerable time to helping ensure that if HCM rules are proposed, the employer voice is front and center so that significant harm is mitigated.

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Authors: Ani Huang

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