Saturday, May 06, 2000
Bill eases option for employees
By Patrick Crowley and The Associated Press
The Cincinnati Enquirer and The Associated Press
Companies may be more likely to offer stock options to employees because new federal legislation spells out that they are a benefit, not a basis for overtime pay.
The Worker Economic Opportunity Act was sponsored by U.S. Sen. Mitch McConnell, a Louisville Republican. It would amend labor laws to ensure that American workers can receive stock options from their employers, he said.
“It makes no difference if you work in the corporate board room or on the factory floor,” Mr. McConnell said. “Everyone should be able to share in the success of the company.”
President Clinton has indicated he will sign the bill into law. It passed the House Wednesday 421-0. Last week it passed the Senate 95-0.
Stock options are often used in the corporate world, particularly at Internet start-up firms, to attract and reward management workers.
Under the legislation, stock options, stock appreciation rights and bona fide stock purchases would be treated as employee benefits and would not be used in calculating overtime compensation.
The bill amends the 1938 Fair Labor Standards Act to make clear that stock option profits should not be considered a part of regular pay in determining overtime.
The chief sponsor in the House, Rep. Randy “Duke” Cunningham, R-Calif., said that when the 1938 law was written, no one knew that want ads today would be filled with jobs offering stock options.
“Workers look at these things when they select a job,” he said.
Last year the Labor Department issued an opinion stating that profits from exercising stock options would have to be included in calculating the regular rate of pay. That decision raised concerns that employers would be disinclined to offer stock options to hourly workers if that would significantly drive up the costs of overtime.
“In recent years, Americans' innovative new workplaces and creative employers have offered new financial opportunities, such as stock options, to hourly employees,” Mr. McConnell said.
“Unfortunately the decades-old labor and employment laws did not seem to allow normal employees to reap the benefits of these perks.”
The law does not require employers to offer stock options, but it does allow them to do so.
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