Stock Options for Hourly Workers in Jeopardy

WASHINGTON, D.C. – The United States Chamber of Commerce today called on Congress to protect workers' benefits and amend the Fair Labor Standards Act to exclude income from stock option programs from hourly employees' overtime pay calculations.

"As the nation's labor shortage intensifies, stock options are becoming an increasingly critical tool for companies to attract and retain good workers and a popular employee incentive to increase worker productivity," said Bruce Josten, U.S. Chamber of Commerce Executive Vice President. "The only way to ensure that employers will continue to offer – and hourly workers continue to enjoy – these benefit programs is for Congress to pass legislation to exempt them from base pay calculations."

The Department of Labor and members of Congress have agreed to protect the stock option benefit, after concerns were raised when a Department of Labor advisory letter suggested stock options were to be used for overtime pay calculations. Without legislation, employers would be forced to engage in a complex recalculation of overtime pay or, more likely, would decline to offer stock options to hourly employees, according to the Chamber.

Companies increasingly are offering stock options and other employee ownership plans, traditionally reserved for executives, to their rank-and-file employees to help attract and retain workers in a tightening labor market and to help boost worker productivity and build team spirit, according to the Chamber.

A 1998 survey by Hewitt Associates found that more than two-thirds of large U.S. companies offer stock option plans to non-executives, including 26 percent that offer stock options to 100 percent of their workforce. In addition, the National Center for Employee Ownership estimates non-management employees collectively own between 6 and 10 percent of total corporate equity. Such plans have put about one trillion dollars in equity into the hands of nearly 17 million Americans.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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