U.S. Chamber Urges Clinton to Protect Stock Option Benefits for Hourly Workers

WASHINGTON, D.C. – The United States Chamber of Commerce called on President Clinton to sign legislation passed today (S. 2323/H.R. 4182) by the House of Representatives to protect employers' ability to offer stock options to hourly workers by exempting that benefit from overtime pay regulations.

"Hourly employees deserve the chance to earn stock options in the high tech economy without penalizing companies with 1930's era regulations," said Randel Johnson Chamber vice president for labor and employee benefits. "The only way to ensure that employers will continue to offer – and hourly workers continue to enjoy – these benefit programs is for Clinton to sign the legislation, passed overwhelmingly by Congress, that specifically exempts stock options from base pay calculations."

The Department of Labor and 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 a legislative solution, 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.

"As the nation's labor shortage intensifies, stock options are an increasingly critical tool for companies to attract and retain good workers and a popular employee incentive to increase worker productivity," said Johnson.

Companies increasingly are offering stock options and other employee ownership plans, traditionally reserved for executives, to their rank-in-file employees. A 1998 survey by Hewitt Associates found that more than two-thirds of employers in 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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