[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2323 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
106th CONGRESS
  2d Session
                                S. 2323

_______________________________________________________________________

                                 AN ACT


 
To amend the Fair Labor Standards Act of 1938 to clarify the treatment 
                    of stock options under the Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Worker Economic Opportunity Act''.

SEC. 2. AMENDMENTS TO THE FAIR LABOR STANDARDS ACT OF 1938.

    (a) Exclusion From Regular Rate.--Section 7(e) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 207(e)) is amended--
            (1) in paragraph (6), by striking ``or'' at the end;
            (2) in paragraph (7), by striking the period and inserting 
        ``; or''; and
            (3) by adding at the end the following:
            ``(8) any value or income derived from employer-provided 
        grants or rights provided pursuant to a stock option, stock 
        appreciation right, or bona fide employee stock purchase 
        program which is not otherwise excludable under any of 
        paragraphs (1) through (7) if--
                    ``(A) grants are made pursuant to a program, the 
                terms and conditions of which are communicated to 
                participating employees either at the beginning of the 
                employee's participation in the program or at the time 
                of the grant;
                    ``(B) in the case of stock options and stock 
                appreciation rights, the grant or right cannot be 
                exercisable for a period of at least 6 months after the 
                time of grant (except that grants or rights may become 
                exercisable because of an employee's death, disability, 
                retirement, or a change in corporate ownership, or 
                other circumstances permitted by regulation), and the 
                exercise price is at least 85 percent of the fair 
                market value of the stock at the time of grant;
                    ``(C) exercise of any grant or right is voluntary; 
                and
                    ``(D) any determinations regarding the award of, 
                and the amount of, employer-provided grants or rights 
                that are based on performance are--
                            ``(i) made based upon meeting previously 
                        established performance criteria (which may 
                        include hours of work, efficiency, or 
                        productivity) of any business unit consisting 
                        of at least 10 employees or of a facility, 
                        except that, any determinations may be based on 
                        length of service or minimum schedule of hours 
                        or days of work; or
                            ``(ii) made based upon the past performance 
                        (which may include any criteria) of one or more 
                        employees in a given period so long as the 
                        determination is in the sole discretion of the 
                        employer and not pursuant to any prior 
                        contract.''.
    (b) Extra Compensation.--Section 7(h) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 207(h)) is amended--
            (1) by striking ``Extra'' and inserting the following:
    ``(2) Extra''; and
            (2) by inserting after the subsection designation the 
        following:
    ``(1) Except as provided in paragraph (2), sums excluded from the 
regular rate pursuant to subsection (e) shall not be creditable toward 
wages required under section 6 or overtime compensation required under 
this section.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 90 days after the date of enactment of this 
Act.
    (d) Liability of Employers.--No employer shall be liable under the 
Fair Labor Standards Act of 1938 for any failure to include in an 
employee's regular rate (as defined for purposes of such Act) any 
income or value derived from employer-provided grants or rights 
obtained pursuant to any stock option, stock appreciation right, or 
employee stock purchase program if--
            (1) the grants or rights were obtained before the effective 
        date described in subsection (c);
            (2) the grants or rights were obtained within the 12-month 
        period beginning on the effective date described in subsection 
        (c), so long as such program was in existence on the date of 
        enactment of this Act and will require shareholder approval to 
        modify such program to comply with section 7(e)(8) of the Fair 
        Labor Standards Act of 1938 (as added by the amendments made by 
        subsection (a)); or
            (3) such program is provided under a collective bargaining 
        agreement that is in effect on the effective date described in 
        subsection (c).
    (e) Regulations.--The Secretary of Labor may promulgate such 
regulations as may be necessary to carry out the amendments made by 
this Act.

            Passed the Senate April 12, 2000.

            Attest:

                                                             Secretary.
106th CONGRESS

  2d Session

                                S. 2323

_______________________________________________________________________

                                 AN ACT

To amend the Fair Labor Standards Act of 1938 to clarify the treatment 
                    of stock options under the Act.