Release Date: Mar 02, 2000Contact: 888-249-NEWS
U.S. Chamber Calls on Congress to Act
WASHINGTON, D.C. – The United States Chamber of Commerce called on Congress to protect employers' ability to offer stock options to hourly workers, by exempting that investment benefit from overtime pay calculations, in testimony today.
"To be required to pay overtime to non-exempt employees based on employees' individual investment profits would result in unfair differentials in the amount of overtime similarly situated employees would receive, and would create an unacceptable administrative and financial burden on the Company that would place such equity grants in jeopardy," testified Patricia Nazemetz, Corporate Vice President for Xerox Corporation, on behalf of the Chamber.
A February 1999 advisory letter by the Department of Labor suggested that calculations of overtime pay for hourly employees must include the value of stock options as a part of their base pay. Typically, employers, such as Xerox, have considered stock options to be outside a worker's regular rate of pay.
Stock options – the right to buy stock at a fixed price – are no longer limited to company officers, but are increasingly offered to non-executives, according to the Chamber. The National Center for Employee Ownership estimates non-management employees collectively own between 6% and 10% of total corporate equity. Such plans have put about one trillion dollars in equity into the hands of nearly 17 million Americans.
"Advisory letters may come and go, but swift, targeted congressional action is critically important," said Randel Johnson, Chamber vice president labor and employee benefits. "The only way to ensure that employers will continue to offer, and hourly workers will continue to enjoy, stock option programs is for Congress to pass legislation to exempt such programs from the calculation of base pay."
The Chamber supports a bipartisan, carefully-crafted approach to address the equity ownership programs and urges Congress to consider legislation that amends the Fair Labor Standards Act to exempt stock option programs from the overtime requirements of the Act.
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.
# # #