[House Report 119-413]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-413
======================================================================
EMPOWERING EMPLOYER CHILD AND ELDER CARE
SOLUTIONS ACT
_______
December 18, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2270]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 2270) to amend the Fair Labor Standards
Act of 1938 to exclude child and dependent care services and
payments from the rate used to compute overtime compensation,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Empowering Employer Child and Elder
Care Solutions Act''.
SEC. 2. EXCLUSION OF CHILD AND DEPENDENT CARE IN COMPUTING OVERTIME
COMPENSATION.
(a) In General.--Section 7(e) of the Fair Labor Standards Act of 1938
(29 U.S.C. 207(e)) is amended--
(1) in paragraph (2), by inserting ``payments or
reimbursements for child or dependent care services;'' after
``by the employer;'';
(2) in paragraph (7), by striking ``or'' at the end;
(3) in paragraph (8)(D)(ii), by striking the period at the
end and inserting ``; or''; and
(4) by adding at the end the following:
``(9) the value of any child or dependent care services
provided by an employer.''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
with respect to overtime compensation required to be paid for workweeks
beginning on or after the date of enactment of this Act.
Purpose
To amend the Fair Labor Standards Act of 1938 to exclude
child and dependent care services and payments from the rate
used to compute overtime compensation.
Committee Action
117TH CONGRESS
Second Session--Hearing
On May 11, 2022, the Subcommittee on Workforce Protections
held a hearing titled ``Standing Up for Workers: Preventing
Wage Theft and Recovering Stolen Wages.'' Witnesses were Tammy
McCutchen, Senior Affiliate, Resolution Economics, New Market,
TN; Karen Cacace, Labor Bureau Chief, New York State Office of
the Attorney General, New York, NY; Daniel Swenson-Klatt,
Owner/Operator, Butter Bakery Cafe, Minneapolis, MN; and
Francisco Esparza, Representative, United Brotherhood of
Carpenters, Upper Marlboro, MD. Ms. McCutchen testified about
excluding child care benefits from the regular rate of pay,
among other topics.
Legislative Action
On July 14, 2022, Representative Elise Stefanik (R-NY)
introduced H.R. 8388, the Empowering Employer Child and Elder
Care Solutions Act, which was referred solely to the Committee
on Education and Labor, but there was no action taken on the
legislation.
118TH CONGRESS
Legislative Action
On May 11, 2023, Representative Stefanik introduced H.R.
3271, the Empowering Employer Child and Elder Care Solutions
Act, which was referred to the Committee on Education and the
Workforce, but there was no action taken on the legislation.
119TH CONGRESS
First Session--Hearing
On March 25, 2025, the Subcommittee on Workforce
Protections held a hearing titled ``The Future of Wage Laws:
Assessing the FLSA's Effectiveness, Challenges, and
Opportunities.'' Witnesses were Tammy McCutchen, Senior
Affiliate, Resolution Economics, New Market TN; Paige Boughan,
Senior Vice President and Director of Human Resources, Farmers
and Merchants Bank, on behalf of SHRM, Westminster, MD; Andrew
Stettner, Director of Economy and Jobs, The Century Foundation,
Washington, DC; and Jonathan Wolfson, Chief Legal Officer and
Policy Director, Cicero Institute, Austin, TX. Witnesses
discussed H.R. 2270, the Empowering Employer Child and Elder
Care Solutions Act, among other topics.
Legislative Action
On March 21, 2025, Representative Mark Messmer (R-IN)
introduced H.R. 2270, the Empowering Employer Child and Elder
Care Solutions Act, with Representatives Ashley Hinson (R-IA),
John Moolenaar (R-MI), and Josh Harder (D-CA) as original
cosponsors. The bill was solely referred to the Committee on
Education and Workforce.
Committee Passage of H.R. 2270
On April 9, 2025, the Committee considered H.R. 2270 in
legislative session and reported it favorably, as amended, to
the House of Representatives by a recorded vote of 18-13.
Representative Messmer offered an amendment in the nature of a
substitute making a technical change to the bill, which was
adopted by voice vote.
Committee Views
INTRODUCTION
The Fair Labor Standards Act of 1938 (FLSA) is the primary
federal statute establishing standards for minimum wage,
overtime pay, child labor, recordkeeping, and other wage-and-
hour standards covering more than 140 million individuals,\1\
including most private and public sector employees. Under the
FLSA, employers must pay covered employees no less than the
federal minimum wage of $7.25 for all hours worked and overtime
pay of time-and-one-half an employee's regular rate of pay for
hours worked in excess of 40 in a given workweek. These
requirements are triggered whenever an employee is ``suffer[ed]
or permit[ted] to work'' directly or indirectly for the benefit
of an employer.\2\
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\1\U.S. Dep't of Lab., Wage & Hour Div., Small Entity Compliance
Guide to the Fair Labor Standards Act's Exemptions for Executive,
Administrative, Professional, Outside Sales, and Computer Employees
(Apr. 24, 2024), https://www.dol.gov/agencies/whd/overtime/rulemaking/
small-entity-compliance-guide.
\2\29 U.S.C. Sec. 203(g).
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REGULAR RATE
Overtime must be paid at one-and-one-half times the
employee's regular rate of pay for each hour over 40 worked in
a workweek. An employee's regular rate includes all payments
made by the employer to or on behalf of the employee, with some
statutorily mandated exclusions.
The formula for computing the regular rate is the
compensation in the workweek (except for statutory exclusions)
divided by the total hours worked in the workweek. The
following are exclusions from the regular rate:
Gifts and payments in the nature of gifts on
special occasions (may not be dependent on the number
of hours worked);
Payments for occasional periods when no work
is performed due to vacation, holidays, illness,
reimbursable business expenses, and other similar
payments;
Discretionary bonuses;
Payments made pursuant to a profit-sharing
plan or a thrift savings plan;
Contributions to benefit plans such as life
or disability insurance or other events that could
cause significant financial hardship;
Premium pay that is triggered due to reasons
other than FLSA-mandated overtime, i.e., extra
compensation for working on weekends, holidays, or days
of rest; and
Certain employee stock options.\3\
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\3\U.S. Dep't of Lab., Wage & Hour Div., Fact Sheet #56A: Overview
of the Regular Rate of Pay Under the Fair Labor Standards Act (FLSA),
https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate.
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FLSA MODERNIZATION
On March 25, 2025, the Subcommittee on Workforce
Protections held a hearing on ``The Future of Wage Laws:
Assessing the FLSA's Effectiveness, Challenges, and
Opportunities.'' Witnesses testified about how the FLSA, with
no major legislative updates since its enactment 87 years ago,
has failed to keep pace with the modern workforce. Witnesses
also suggested legislative solutions to make the FLSA less
rigid and remove employer disincentives that currently limit an
hourly employee's ability to receive certain non-wage benefits.
Witnesses further testified that the FLSA should alter outdated
standards which prevent employers from providing benefits such
as child care to employees.
At the March 25, 2025, hearing, Ms. Tammy McCutchen, former
U.S. Department of Labor Wage and Hour Division Administrator,
testified that the way an hourly employee's regular rate for
overtime pay is calculated has not been changed legislatively
in 76 years, except for a 2000 update to exclude certain stock
options from the regular rate.\4\ She recommended amending FLSA
Section 7(e) to exclude other non-wage benefits from regular
rate calculations to encourage employers to provide benefits
and increase access to benefits for workers. She also testified
that such a change would allow private sector employers to more
easily provide child care for their employees.\5\
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\4\The Future of Wage Laws: Assessing the FLSA's Effectiveness,
Challenges, and Opportunities: Hearing Before the Subcomm. on Workforce
Protections of the H. Comm. on Educ. & Workforce, 119th Cong. (2025)
(written statement of Tammy McCutchen, Senior Affiliate, Resolution
Econ., at 3).
\5\Id. (testimony of Tammy McCutchen, Senior Affiliate, Resolution
Econ.) (``would free employers to provide child care'').
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At the same hearing, Mr. Jonathan Wolfson, former Assistant
Secretary of Labor for Policy during the first Trump
Administration, highlighted the need to remove barriers that
allow employees to access to child care:
Without employer-provided assistance, many workers
struggle with the high costs of child and elder care.
This financial strain often forces employees--
particularly women--to reduce work hours or leave the
workforce entirely. By removing barriers to employer-
sponsored caregiving benefits, [H.R. 2270] would
encourage more businesses to provide assistance,
helping workers remain in their jobs while managing
caregiving responsibilities. This bill could both
support families and improve workforce participation,
all while benefiting the businesses that hire workers
who need these benefits.\6\
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\6\Id. (written statement of Jonathan Wolfson, Chief Legal Off. &
Pol'y Dir., Cicero Inst., at 7).
In addition, Ms. Emily M. Dickens from SHRM stated
regarding the Empowering Employer Child and Elder Care
Solutions Act that ``H.R. 2270 represents meaningful progress
by encouraging employers to offer onsite or subsidized
dependent care benefits through statutory recognition that such
benefits are excluded from the `regular rate' calculation under
the FLSA.''\7\
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\7\Letter from Emily M. Dickens, Chief of Staff, Head of Gov't
Pol'y, & Corp. Sec'y, SHRM, to Chairman Tim Walberg & Ranking Member
Bobby Scott, Comm. on Educ. & Workforce (Apr. 8, 2025) (on file with
Comm.).
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EMPOWERING EMPLOYER CHILD AND ELDER CARE SOLUTIONS ACT
On March 21, Representatives Mark Messmer (R-IN) and Josh
Harder (D-CA) introduced H.R. 2270, the Empowering Employer
Child and Elder Care Solutions Act, which was referred solely
to the Committee on Education and Workforce. This bill amends
FLSA Section 7(e) to exclude the value of employer-funded child
or dependent care from the calculation of an eligible
employee's overtime pay. Under current law, overtime hours must
be paid at time-and-one-half of an employee's regular rate of
pay. The regular rate is an average hourly rate that must
include certain types of compensation, such as commissions,
incentive pay, and certain non-cash payments. The bill
specifies that an employer can provide or pay for child or
dependent care services without the value of these services
being included in this calculation.
CONCLUSION
Workers and businesses benefit from easy-to-understand
wage-and-hour rules--and they struggle with impossible
compliance burdens and red tape. Former Wage and Hour
Administrator Tammy McCutchen stated at the March 25, 2025,
Workforce Protections Subcommittee hearing: ``we need clear and
simple rules that small businesses and workers can understand
without an attorney or HR professionals.''\8\ Excluding child
and dependent care from regular rate calculations is an
important step toward modernizing the FLSA and making it work
better for 21st century workers and families.
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\8\The Future of Wage Laws: Assessing the FLSA's Effectiveness,
Challenges, and Opportunities: Hearing Before the Subcomm. on Workforce
Protections of the H. Comm. on Educ. & Workforce, 119th Cong. (2025)
(written statement of Tammy McCutchen, Senior Affiliate, Resolution
Econ., at 3).
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H.R. 2270 Summary
H.R. 2270 amends the FLSA to exclude any child or dependent
care services provided by the employer from regular rate
calculations.
H.R. 2270 Section-by-Section Summary
Section 1--Short title
Names the bill the Empowering Employer Child and Elder Care
Solutions Act.
Section 2--Exclusion of child and dependent care in computing overtime
compensation
Section 2 amends FLSA Section 7(e) to expand the definition
of ``regular rate'' to exclude payments or reimbursements for
child or dependent care services or the value of any child or
dependent care services provided by the employer. It also
directs this change to apply to overtime compensation paid for
workweeks beginning on or after the date of the bill's
enactment.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of rule XIII of the Rules
of the House of Representatives, the goal of H.R. 2270 is to
exclude child and dependent care services and payments from the
rate used to compute overtime compensation under the Fair Labor
Standards Act of 1938.
Explanation of Amendments
The amendment in the nature of a substitute is explained in
the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 2270 amends the Fair Labor Standards Act of 1938
to exclude child and dependent care services and payments from
the rate used to compute overtime compensation for employees,
including eligible employees of the legislative branch.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee adopts as its own the
cost estimate prepared by the Director of the Congressional
Budget Office (CBO) pursuant to section 402 of the
Congressional Budget and Impoundment Control Act of 1974.
Earmark Statement
H.R. 2270 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House rule XIII, the
goal of H.R. 2270, is to amend the Fair Labor Standards Act of
1938 to exclude child and dependent care services and payments
from the rate used to compute overtime compensation.
Duplication of Federal Programs
No provision of H.R. 2270 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Statement of Oversight Findings and Recommendations
of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the committee's oversight findings and recommendations are
reflected in the body of this report.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII the
following hearing held during the 119th Congress was used to
develop or consider H.R. 2270: On March 25, 2025, the Committee
on Education and Workforce Subcommittee on Workforce
Protections held a hearing on ``The Future of Wage Laws:
Assessing the FLSA's Effectiveness, Challenges, and
Opportunities.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee adopts as its
own the cost estimate for the bill prepared by the Director of
the Congressional Budget Office.
Summary of legislation: On April 9, 2025, the House
Committee on Education and the Workforce ordered reported four
bills and one joint resolution. This document provides
estimates for two of those bills, H.R. 2262 and H.R. 2270. Both
bills would amend the Fair Labor Standards Act (FLSA), which
establishes minimum wage, overtime pay, and other standards
affecting most private and public-sector employees.
H.R. 2262, the Flexibility for Workers
Education Act, would exclude time spent on certain
activities from counting as work time under the FLSA.
Under current law, attendance at activities such as
lectures and training programs do not need to be
counted as work time if attendance is voluntary and
outside of employee's working hours, the activity is
unrelated to the employee's job, and the employee did
not perform any productive work. H.R. 2262 would remove
the criteria that the activity be unrelated to the
employee's job.
H.R. 2270, the Empowering Employer Child and
Elder Care Solutions Act, would exclude payments or
reimbursements for child and dependent care services
from the computation of overtime compensation under the
FLSA.
Estimated Federal cost: The costs of the legislation fall
within budget function 500 (education, training, employment,
and social services).
Basis of estimate: For this estimate, CBO assumes that the
bills will be enacted before the end of fiscal year 2025. This
estimate does not include any effects of interactions among the
bills. If both bills were combined and enacted as a single
piece of legislation, the estimated costs would be different,
but the total increase in the deficit would still be less than
$500,000 over the 2025-2035 period.
Both H.R. 2262 and H.R. 2270 amend the FLSA. That law
authorizes the Department of Labor (DOL) to impose and collect
civil monetary penalties from employers that violate it. Such
penalties are recorded in the federal budget as revenues, and a
portion can be spent without further appropriation. DOL
typically collects less than $10 million per year in civil
monetary penalties for FLSA violations.
Enacting each of the bills would result in fewer entities
being subject to those penalties. CBO estimates that the
reduction in amounts collected would be small and that the
decrease in revenues and direct spending, and the resulting net
increase in the deficit would be less than $500,000 over the
2025-2035 period.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. CBO estimates that enacting each of the bills would
decrease direct spending and revenues by less than $500,000
over the 2025-2035 period.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting H.R. 2262 and H.R. 2270 would not
significantly increase net direct spending in any of the four
consecutive 10-year periods beginning in 2036.
CBO estimates that enacting H.R. 2262 and H.R. 2270 would
not significantly increase on-budget deficits in any of the
four consecutive 10-year periods beginning in 2036.
Mandates: Neither bill contains an intergovernmental or
private-sector mandate as defined in the Unfunded Mandates
Reform Act.
Estimate prepared by: Federal costs: Meredith Decker;
Revenues: Joshua Shakin; Mandates: Erich Dvorak.
Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income
Security Cost Estimates Unit; Joshua Shakin, Chief, Revenue
Projections Unit; Kathleen FitzGerald, Chief, Public and
Private Mandates Unit; Christina Hawley Anthony, Deputy
Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 2270.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee adopts as its own the cost estimate for the bill
prepared by the Director of the Congressional Budget Office.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
maximum hours
Sec. 7. (a)(1) Except as otherwise provided in this section,
no employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, for a
workweek longer than forty hours unless such employee receives
compensation for his employment in excess of the hours above
specified at a rate not less than one and one-half times the
regular rate at which he is employed.
(2) No employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, and who in
such workweek is brought within the purview of this subsection
by the amendments made to this Act by the Fair Labor Standards
Amendments of 1966--
(A) for a workweek longer than forty-four hours
during the first year from the effective date of the
Fair Labor Standards Amendments of 1966,
(B) for a workweek longer than forty-two hours during
the second year from such date, or
(C) for a workweek longer than forty hours after the
expiration of the second year from such date,
unless such employee receives compensation for his employment
in excess of the hours above specified at a rate not less than
one and one-half times the regular rate at which he is
employed.
(b) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of that
specified in such subsection without paying the compensation
for overtime employment prescribed therein if such employee is
so employed--
(1) in pursuance of an agreement, made as a result of
collective bargaining by representatives of employees
certified as bona fide by the National Labor Relations
Board, which provides that no employee shall be
employed more than one thousand and forty hours during
any period of twenty-six consecutive weeks, or
(2) in pursuance of an agreement, made as a result of
collective bargaining by representatives of employees
certified as bona fide by the National Labor Relations
Board which provides that during a specified period of
fifty-two consecutive weeks the employee shall be
employed not more than two thousand two hundred and
forty hours and shall be guaranteed not less than one
thousand eight hundred and forty hours (or not less
than forty-six weeks at the normal number of hours
worked per week, but not less than thirty hours per
week) and not more than two thousand and eighty hours
of employment for which he shall receive compensation
for all hours guaranteed or worked at rates not less
than those applicable under the agreement to the work
performed and for all hours in excess of the guaranty
which are also in excess of the maximum workweek
applicable to such employee under subsection (a) or two
thousand and eighty in such period at rates not less
than one and one-half times the regular rate at which
he is employed; or
(3) by an independently owned and controlled local
enterprise (including an enterprise with more than one
bulk storage establishment) engaged in the wholesale or
bulk distribution of petroleum products if--
(A) the annual gross volume of sales of such
enterprise is less than $1,000,000 exclusive of
excise taxes.
(B) more than 75 per centum of such
enterprise's annual dollar volume of sales is
made within the State in which such enterprise
is located, and
(C) not more than 25 per centum of the annual
dollar volume of sales of such enterprise is to
customers who are engaged in the bulk
distribution of such products for resale;
and if such employee receives compensation for employment in
excess of twelve hours in any workday, or for employment in
excess of fifty-six hours in any workweek, as the case may be,
at a rate not less than one and one-half times the regular rate
at which he is employed.
(e) As used in this section the ``regular rate'' at which an
employee is employed shall be deemed to include all
remuneration for employment paid to, or on behalf of, the
employee, but shall not be deemed to include--
(1) sums paid as gifts; payments in the nature of
gifts made at Christmas time or on other special
occasions, as a reward for service, the amounts of
which are not measured by or dependent on hours worked,
production, or efficiency;
(2) payments made for occasional periods when no work
is performed due to vacation, holiday, illness, failure
of the employer to provide sufficient work or other
similar cause; reasonable payments for traveling
expenses, or other expenses, incurred by an employee in
the furtherance of his employer's interests and
properly reimburseable by the employer; payments or
reimbursements for child or dependent care services;
and other similar payments to any employee which are
not made as compensation for his hours of employment;
(3) sums paid in recognition of services performed
during a given period if either, (a) both the fact that
payment is to be made and the amount of the payment are
determined at the sole discretion of the employer at or
near the end of the period and not pursuant to any
prior contract, agreement, or promise causing the
employee to expect such payments regularly; or (b) the
payments are made pursuant to a bona fide profit-
sharing plan or trust or bona fide thrift or savings
plan, meeting the requirements of the Secretary of
Labor set forth in appropriate regulations which he
shall issue, having due regard among other relevant
facts, to the extent to which the amounts paid to the
employee are determined without regard to hours of
work, production, or efficiency; or (c) the payments
are talent fees (as such talent fees are defined and
delimited by regulations of the Secretary) paid to
performers, including announcers, on radio and
television programs;
(4) contributions irrevocably made by an employer to
a trustee or third person pursuant to a bona fide plan
for providing old-age retirement, life, accident, or
health insurance or similar benefits for employees;
(5) extra compensation provided by a premium rate
paid for certain hours worked by the employee in any
day or workweek because such hours are hours worked in
excess of eight in a day or in excess of the maximum
workweek applicable to such employee under subsection
(a) or in excess of the employee's normal working hours
or regular working hours, as the case may be;
(6) extra compensation provided by a premium rate
paid for work by the employee on Saturdays, Sundays,
holidays, or regular days of rest, or on the sixth or
seventh day of the workweek, where such premium rate is
not less than one and one-half times the rate
established in good faith for like work performed in
nonovertime hours on other days;
(7) extra compensation provided by a premium rate
paid to the employee, in pursuance of an applicable
employment contract or collective-bargaining agreement,
for work outside of the hours established in good faith
by the contract or agreement as the basic, normal, or
regular workday (not exceeding eight hours) or workweek
(not exceeding the maximum workweek applicable to such
employee under subsection (a)), where such premium rate
is not less than one and one-half times the rate
established in good faith by the contract or agreement
for like work performed during such workday or
workweek; [or]
(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[.]; or
(9) the value of any child or dependent care services
provided by an employer.
(f) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of the
maximum workweek applicable to such employee under subsection
(a) if such employee is employed pursuant to a bona fide
individual contract, or pursuant to an agreement made as a
result of collective bargaining by representatives of
employees, if the duties of such employee necessitate irregular
hours of work, and the contract or agreement (1) specifies a
regular rate of pay of not less than the minimum hourly rate
provided in subsection (a) or (b) of section 6 (whichever may
be applicable) and compensation at not less than one and one-
half times such rate for all hours worked in excess of such
maximum workweek, and (2) provides a weekly guaranty of pay for
not more than sixty hours based on the rates so specified.
(g) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of the
maximum workweek applicable to such employee under such
subsection if, pursuant to an agreement or understanding
arrived at between the employer and the employee before
performance of the work, the amount paid to the employee for
the number of hours worked by him in such workweek in excess of
the maximum workweek applicable to such employee under such
subsection--
(1) in the case of an employee employed at piece
rates, is computed at piece rates not less than one and
one-half times the bona fide piece rates applicable to
the same work when performed during nonovertime hours;
or
(2) in the case of an employee performing two or more
kinds of work for which different hourly or piece rates
have been established, is computed at rates not less
than one and one-half times such bona fide rates
applicable to the same work when performed during
nonovertime hours; or
(3) is computed at a rate not less than one and one-
half times the rate established by such agreement or
understanding as the basic rate to be used in computing
overtime compensation thereunder: Provided, That the
rate so established shall be authorized by regulation
by the Secretary of Labor as being substantially
equivalent to the average hourly earnings of the
employee, exclusive of overtime premiums, in the
particular work over a representative period of time;
and if (i) the employee's average hourly earnings for the
workweek exclusive of payments described in paragraphs (1)
through (7) of subsection (e) are not less than the minimum
hourly rate required by applicable law, and (ii) extra overtime
compensation is properly computed and paid on other forms of
additional pay required to be included in computing the regular
rate.
(h)(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.
(2) Extra compensation paid as described in paragraphs (5),
(6), and (7) of subsection (e) shall be creditable toward
overtime compensation payable pursuant to this section.
(i) No employer shall be deemed to have violated subsection
(a) by employing any employee of a retail or service
establishment for a workweek in excess of the applicable
workweek specified therein, if (1) the regular rate of pay of
such employee is in excess of one and one-half times the
minimum hourly rate applicable to him under section 6, and (2)
more than half his compensation for a representative period
(not less than one month) represents commissions on goods or
services. In determining the proportion of compensation
representing commissions, all earnings resulting from the
application of a bona fide commission rate shall be deemed
commissions on goods or services without regard to whether the
computed commissions exceed the draw or guarantee.
(j) No employer engaged in the operation of a hospital or an
establishment which is an institution primarily engaged in the
care of the sick, the aged, or the mentally ill or defective
who reside on the premises shall be deemed to have violated
subsection (a) if, pursuant to an agreement or understanding
arrived at between the employer and the employee before
performance of the work, a work period of fourteen consecutive
days is accepted in lieu of the workweek of seven consecutive
days for purposes of overtime computation and if, for his
employment in excess of eight hours in any workday and in
excess of eighty hours in such fourteen-day period, the
employee receives compensation at a rate of not less than one
and one-half times the regular rate at which he is employed.
(k) No public agency shall be deemed to have violated
subsection (a) with respect to the employment of any employee
in fire protection activities or any employee in law
enforcement activities (including security personnel in
correctional institutions) if--
(1) in a work period of 28 consecutive days the
employee receives for tours of duty which in the
aggregate exceed the lesser of (A) 216 hours, or (B)
the average number of hours (as determined by the
Secretary pursuant to section 6(c)(3) of the Fair Labor
Standards Amendments of 1974) in tours of duty of
employees engaged in such activities in work periods of
28 consecutive days in calendar year 1975; or
(2) in the case of such employee to whom a work
period of at least 7 but less than 28 days applies, in
his work period the employee receives for tours of duty
which in the aggregate exceed a number of hours which
bears the same ratio to the number of consecutive days
in his work period as 216 hours (or if lower, the
number of hours referred to in clause (B) of paragraph
(1)) bears to 28 days;
compensation at a rate not less than one and one-half times the
regular rate at which he is employed.
(l) No employer shall employ any employee in domestic service
in one or more households for a workweek longer than forty
hours unless such employee receives compensation for such
employment in accordance with subsection (a).
(m) For a period or periods of not more than fourteen
workweeks in the aggregate in any calendar year, any employer
may employ any employee for a workweek in excess of that
specified in subsection (a) without paying the compensation for
overtime employment prescribed in such subsection, if such
employee--
(1) is employed by such employer--
(A) to provide services (including stripping
and grading) necessary and incidental to the
sale at auction of green leaf tobacco of type
11, 12, 13, 14, 21, 22, 23, 24, 31, 35, 36, or
37 (as such types are defined by the Secretary
of Agriculture), or in auction sale, buying,
handling, stemming, redrying, packing, and
storing of such tobacco,
(B) in auction sale, buying, handling,
sorting, grading, packing, or storing green
leaf tobacco of type 32 (as such type is
defined by the Secretary of Agriculture), or
(C) in auction sale, buying, handling,
stripping, sorting, grading, sizing, packing,
or stemming prior to packing, of perishable
cigar leaf tobacco of type 41, 42, 43, 44, 45,
46, 51, 52, 53, 54, 55, 61, or 62 (as such
types are defined by the Secretary of
Agriculture); and
(2) receives for--
(A) such employment by such employer which is
in excess of ten hours in any workday, and
(B) such employment by such employer which is
in excess of forty-eight hours in any workweek,
compensation at a rate not less than one and one-half
times the regular rate at which he is employed.
An employer who receives an exemption under this subsection
shall not be eligible for any other exemption under this
section.
(n) In the case of an employee of an employer engaged in the
business of operating a street, suburban or interurban electric
railway or local trolley or motorbus carrier (regardless of
whether or not such railway or carrier is public or private or
operated for profit or not for profit), in determining the
hours of employment of such an employee to which the rate
prescribed by subsection (a) applies there shall be excluded
the hours such employee was employed in charter activities by
such employer if (1) the employee's employment in such
activities was pursuant to an agreement or understanding with
his employer arrived at before engaging in such employment, and
(2) if employment in such activities is not part of such
employee's regular employment.
(o)(1) Employees of a public agency which is a State, a
political subdivision of a State, or an interstate governmental
agency may receive, in accordance with this subsection and in
lieu of overtime compensation, compensatory time off at a rate
not less than one and one-half hours for each hour of
employment for which overtime compensation is required by this
section.
(2) A public agency may provide compensatory time under
paragraph (1) only--
(A) pursuant to--
(i) applicable provisions of a collective
bargaining agreement, memorandum of
understanding, or any other agreement between
the public agency and representatives of such
employees; or
(ii) in the case of employees not covered by
subclause (i), an agreement or understanding
arrived at between the employer and employee
before the performance of the work; and
(B) if the employee has not accrued compensatory time
in excess of the limit applicable to the employee
prescribed by paragraph (3).
In the case of employees described in clause (A)(ii) hired
prior to April 15, 1986, the regular practice in effect on
April 15, 1986, with respect to compensatory time off for such
employees in lieu of the receipt of overtime compensation,
shall constitute an agreement or understanding under such
clause (A)(ii). Except as provided in the previous sentence,
the provision of compensatory time off to such employees for
hours worked after April 14, 1986, shall be in accordance with
this subsection.
(3)(A) If the work of an employee for which compensatory time
may be provided included work in a public safety activity, an
emergency response activity, or a seasonal activity, the
employee engaged in such work may accrue not more than 480
hours of compensatory time for hours worked after April 15,
1986. If such work was any other work, the employee engaged in
such work may accrue not more than 240 hours of compensatory
time for hours worked after April 15, 1986. Any such employee
who, after April 15, 1986, has accrued 480 or 240 hours, as the
case may be, of compensatory time off shall, for additional
overtime hours of work, be paid overtime compensation.
(B) If compensation is paid to an employee for accrued
compensatory time off, such compensation shall be paid at the
regular rate earned by the employee at the time the employee
receives such payment.
(4) An employee who has accrued compensatory time off
authorized to be provided under paragraph (1) shall, upon
termination of employment, be paid for the unused compensatory
time at a rate of compensation not less than--
(A) the average regular rate received by such
employee during the last 3 years of the employee's
employment, or
(B) the final regular rate received by such employee,
whichever is higher
(5) An employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency--
(A) who has accrued compensatory time off authorized
to be provided under paragraph (1), and
(B) who has requested the use of such compensatory
time,
shall be permitted by the employee's employer to use such time
within a reasonable period after making the request if the use
of the compensatory time does not unduly disrupt the operations
of the public agency.
(6) The hours an employee of a public agency performs court
reporting transcript preparation duties shall not be considered
as hours worked for the purposes of subsection (a) if--
(A) such employee is paid at a per-page rate which is
not less than--
(i) the maximum rate established by State law
or local ordinance for the jurisdiction of such
public agency,
(ii) the maximum rate otherwise established
by a judicial or administrative officer and in
effect on July 1, 1995, or
(iii) the rate freely negotiated between the
employee and the party requesting the
transcript, other than the judge who presided
over the proceedings being transcribed, and
(B) the hours spent performing such duties are
outside of the hours such employee performs other work
(including hours for which the agency requires the
employee's attendance) pursuant to the employment
relationship with such public agency.
For purposes of this section, the amount paid such employee in
accordance with subparagraph (A) for the performance of court
reporting transcript preparation duties, shall not be
considered in the calculation of the regular rate at which such
employee is employed.
(7) For purposes of this subsection--
(A) the term ``overtime compensation'' means the
compensation required by subsection (a), and
(B) the terms ``compensatory time'' and
``compensatory time off'' mean hours during which an
employee is not working, which are not counted as hours
worked during the applicable workweek or other work
period for purposes of overtime compensation, and for
which the employee is compensated at the employee's
regular rate.
(p)(1) If an individual who is employed by a State, political
subdivision of a State, or an interstate governmental agency in
fire protection or law enforcement activities (including
activities of security personnel in correctional institutions)
and who, solely at such individual's option, agrees to be
employed on a special detail by a separate or independent
employer in fire protection, law enforcement, or related
activities, the hours such individual was employed by such
separate and independent employer shall be excluded by the
public agency employing such individual in the calculation of
the hours for which the employee is entitled to overtime
compensation under this section if the public agency--
(A) requires that its employees engaged in fire
protection, law enforcement, or security activities be
hired by a separate and independent employer to perform
the special detail,
(B) facilitates the employment of such employees by a
separate and independent employer, or
(C) otherwise affects the condition of employment of
such employees by a separate and independent employer.
(2) If an employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency undertakes, on an occasional or sporadic basis and
solely at the employee's option, part-time employment for the
public agency which is in a different capacity from any
capacity in which the employee is regularly employed with the
public agency, the hours such employee was employed in
performing the different employment shall be excluded by the
public agency in the calculation of the hours for which the
employee is entitled to overtime compensation under this
section.
(3) If an individual who is employed in any capacity by a
public agency which is a State, political subdivision of a
State, or an interstate governmental agency, agrees, with the
approval of the public agency and solely at the option of such
individual, to substitute during scheduled work hours for
another individual who is employed by such agency in the same
capacity, the hours such employee worked as a substitute shall
be excluded by the public agency in the calculation of the
hours for which the employee is entitled to overtime
compensation under this section.
(q) Any employer may employ any employee for a period or
periods of not more than 10 hours in the aggregate in any
workweek in excess of the maximum workweek specified in
subsection (a) without paying the compensation for overtime
employment prescribed in such subsection, if during such period
or periods the employee is receiving remedial education that
is--
(1) provided to employees who lack a high school
diploma or educational attainment at the eighth grade
level;
(2) designed to provide reading and other basic
skills at an eighth grade level or below; and
(3) does not include job specific training.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
H.R. 2270, the Empowering Employer Child and Elder Care
Solutions Act, would allow employers to pay their workers less
overtime than they are owed by excluding child and dependent
care services and payments from the rate used to compute
overtime compensation. It would contradict the basic premise,
going back to 1938, that employers should be disincentivized
from requiring employees to work overtime hours. As a result,
it would--in the name of incentivizing child and elder
subsidies--actually drive up workers' child and elder costs.
BACKGROUND
Underlying Law
The Fair Labor Standards Act of 1938 (FLSA) is the core
federal workplace standards law governing minimum wage,
overtime, oppressive child labor, and other fundamental
workplace standards.\1\ FLSA is enforced by both the Wage and
Hour Division (WHD) of the U.S. Department of Labor (DOL) as
well as private litigants.\2\
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\1\Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified at 29 U.S.C.
Sec. 201 et seq.).
\2\Id. Sec. 16.
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Section 7 of FLSA establishes maximum work week provisions
at 40 hours per week.\3\ Any employer who requires employees to
work in excess of 40 hours per week is required to pay an
overtime premium of 1.5 times the employees' regular rate of
pay.\4\ FLSA includes many exemptions\5\ and special provisions
for particular workplaces.\6\ For convenience, this discussion
will use the term ``employee'' to mean non-exempt employees and
will focus on the paradigmatic case of hourly workers in
typical private-sector jobs.
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\3\Id. Sec. 7(a)(1).
\4\Id.
\5\See, e.g., id. Sec. Sec. 13(a)(1) (bona fide executive,
administrative, and professional employees), 13(a)(5) (aquaculture and
fishing employees), 13(a)(6) (many kinds of agricultural and livestock
workers), 13(b) (interstate transportation workers).
\6\See, e.g., id. Sec. 7(j) (permitting hospital and care
facilities to apply overtime on a 14-day rather than seven-day work
period), 7(k) (special rules for public-sector employees in fire
protection and policing), 7(m) (seasonal exemption for tobacco-related
workers), 7(o) (special compensatory time option for public employers).
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Regular Rate
Pursuant to FLSA, the overtime premium of ``time and a
half'' is not merely 1.5 times the hourly wage but, instead,
1.5 times the ``regular rate at which [the employee] is
employed.''\7\ The regular rate ``include[s] all remuneration
for employment,'' other than eight exceptions specified in
section 7(e), including Christmas bonuses, paid time off,
profit-sharing payouts, insurance or retirement benefits,
Sunday or holiday work premiums, and stock options.\8\
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\7\Id. Sec. 7(a)(1). Additionally, the term ``wage'' is itself
broad, defined as ``includ[ing] the reasonable cost, as determined by
the [WHD] Administrator, to the employer of furnishing such employee
with board, lodging, or other facilities, if such board, lodging or
other facilities are customarily furnished by such employer to his
employees,'' subject to some exclusions. Id. Sec. 3(m).
\8\Id. Sec. 7(e).
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Within this list of exceptions, section 7(e)(2) specifies
several payments paid to or on behalf of the employee that are
excluded from the calculation of the regular rate.\9\ It
includes occasional periods where the employee does not work
due to vacation, holiday, sickness, the employer's failure to
provide sufficient work, or other similar causes; reasonable
payments for travel expenses the employee incurs for business
travel; and other ``similar payments to an employee which are
not made as compensation for [their] hours of employment.''\10\
---------------------------------------------------------------------------
\9\Id. Sec. 7(e)(2).
\10\Id.
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The entire universe of rules, read together, can seem
daunting, but the complexity reflects the varieties of forms of
employment, payment practices, and industry and occupational
customs in the nation's economy. The overtime pay calculation
boils down elegantly nonetheless:
Total compensation in the workweek (except for
statutory exclusions) Total hours worked in the
workweek = Regular Rate for the workweek.\11\
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\11\Wage & Hr. Div., Fact Sheet #56A: Overview of the Regular Rate
of Pay Under the Fair Labor Standards Act (FLSA), U.S. Dep't of Lab.
(Dec. 2019), https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-
rate.
Some ``perks'' may be excluded by law, but a general
principle applies: ``When a payment is a wage supplement, even
if not directly related to employee performance or hours
worked, it is still compensation for `hours of employment' and
must be included in the regular rate.''\12\
---------------------------------------------------------------------------
\12\Id.
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How Child and Dependent Care Benefits Are Considered in Regular Rate
During the Reagan Administration, a WHD Opinion Letter
explained that child care benefits, whether provided onsite or
by a subsidy payment to the employee, are included in the
regular rate. Presented with the scenario of an employer
contracting for child care services and employees who receive
the service paying for it by way of a paycheck deduction and/or
receiving an employer subsidy, WHD concluded that such services
should be incorporated into the regular rate of pay for
purposes of overtime calculations. That a third-party
contractor might be involved was irrelevant; as WHD explained,
``where an employer is directed by an employee to pay a sum for
the benefit of the employee to a third party, such payment will
be considered the same as payment to the employee, if the
employer does not directly or indirectly derive any profit or
benefit from the transaction.''\13\
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\13\Wage & Hr. Div., U.S. Dep't of Lab., Op. Ltr. No. FLSA-642
(Jan. 23, 1983), https://www.dol.gov/sites/dolgov/files/WHD/opinion-
letters/legacy/ol_1983-01-23_a.pdf.
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More recently, in the text accompanying a 2020 final rule
on regular rate calculations, the Trump Administration
distinguished between occasional, irregular, or emergency child
care benefits and regularly provided benefits. In the
explanatory matter, WHD considered the latter under FLSA
Sec. 7(e)(2), which excludes from regular rate calculations the
value of work travel reimbursements, payments made for
occasional periods of nonwork such sick days, and ``other
similar payments . . . not made as compensation for . . . hours
of employment'':
Several commenters [representing employer groups]
asked [DOL] to clarify that childcare services or
subsidies are excludable from the regular rate. . . .
[DOL] has taken a broad view of what is considered to
be a ``wage'' under 3(m) of the FLSA and as such, some
payments for childcare services or subsidies may be
considered a wage. Payments for childcare services or
subsidies are excludable from the regular rate . . . to
the extent such payments are not wages under section
3(m). For instance, routinely-provided childcare
qualifies as an in-kind reimbursement for ``expenses
normally incurred by the employee for his own
benefit,'' which are wages that must be included in the
regular rate. However, emergency childcare services
provided by employers as an important component of
their work-life support packages do not meet this test
and may be excluded from the regular rate, if such
services are not provided as compensation for hours of
employment. Emergency care is provided in the case of
unforeseen circumstances, such as when schools or
daycares are closed for bad weather or when a child is
sick. If these payments are not tied to the quality or
quantity of work performed, they are properly excluded
from the regular rate under section 7(e)(2)'s ``other
similar payments'' clause.\14\
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\14\Regular Rate Under the Fair Labor Standards Act, 84 Fed. Reg.
68,736, 68,751 (Dec. 16, 2019).
The Majority has not offered any explanation for diverging
from the fundamental premise of the overtime provisions as they
were written in 1938, interpreted with clarity in 1983, and
persuasively explained as recently as 2020.
SHORTCOMINGS OF THE LEGISLATION
Encouraging Excessive Work
The enactment of FLSA's overtime provision in 1938 was the
culmination of a decades-long effort to reduce overwork in the
pre-1938 economy, particularly in the industrial sectors, where
10- to 12-hour shifts were once routine.\15\ Labor movements
rallying for limiting working hours and days were given a boost
in their efforts due to labor shortages during World War I that
gave workers more leverage to demand fewer hours and shorter
work weeks, even leading to a brief ``golden age'' for American
workers that included widespread adoption of the 8-hour work
day.\16\ Post-World War I, industrialists attempted to roll
back these gains and increase workers' hours but were met with
fierce opposition from workers.\17\ Among the most commonly
stated rationales for finally securing the 40-hour work week in
FLSA were: (1) guaranteeing work/life balance--``[e]ight hours
for work, eight hours for rest, eight hours for what you
will;'' and (2) addressing the unemployment crisis of the Great
Depression by incentivizing employers to hire additional
workers to fill the gap left by shrinking shifts from 10 or 12
hours to eight.\18\
---------------------------------------------------------------------------
\16\Id.
\17\Id.
\18\Gillian Brockell, That Time America Almost Had a 30-Hour
Workweek, Wash. Post (Sept. 6, 2021), https://www.washingtonpost.com/
history/2021/09/06/40-hour-work-week-fdr/.
\15\Dave Roos, The Origins of the Five-Day Work Week in America,
History (Jan. 29, 2025), https://www.history.com/articles/five-day-
work-week-labor-movement.
---------------------------------------------------------------------------
The overriding purpose of FLSA's overtime provisions is not
to reward excessive work but, instead, to discourage employers
from demanding it. Any bill that exempts forms of compensation
from the regular rate chips away at the disincentive that makes
the 40-hour work week the rule rather than the exception.
Perverse Incentives
Although it is framed in terms of encouraging employers to
offer more child and elder care support benefits, H.R. 2270
would ultimately make it easier for employers to pay out less
in overtime to workers precisely when--because the work week
has stretched beyond 40 hours--workers are driven to need more,
and more expensive, care. For these workers, care costs are
likely to increase substantially.\19\
---------------------------------------------------------------------------
\19\Who Provides Child Care During Nontraditional Hours?, Child
Care Aware of America, https://info.childcareaware.org/hubfs/
Who%20provides%20child%20care%20during%20
nontraditional%20hours.pdf (last visited Apr. 17, 2025).
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That's assuming that care services are even available at
all. As of 2018, 51 percent of Americans were living in child
care deserts, defined as areas with little to no licensed child
care capacity.\20\ For those who do have access, only eight
percent of child care centers are open early (before 7:00 a.m.)
or late (after 6:00 p.m.).\21\ Although regulated family child
care homes (a small and declining share of the child care
industry) ``tend to have more flexible hours than centers, two-
thirds do not serve families during these hours.''\22\ Workers
pushed into overtime hours may, as a result, turn to informal
and unlicensed care options, but such options are not eligible
for public child care assistance funds on which low-wage
workers rely.\23\ Unlicensed child care options also come with
safety risks to the child.\24\
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\20\Rasheed Malik, Katie Hamm & Leila Schochet, America's Child
Care Deserts in 2018, Ctr. for Am. Progress (Dec. 6, 2018), https://
www.americanprogress.org/article/americas-child-care-deserts-2018/.
\21\Gina Adams et al., To Make the Child Care System More
Equitable, Expand Options for Parents Working Nontraditional Hours,
Urban Inst. (Jan. 14, 2021), https://www.urban.org/urban-wire/make-
child-care-system-more-equitable-expand-options-parents-working-
nontraditional-hour.
\22\Id.
\23\Id.
\24\Danielle DaRos, I-Team: The Risks of Unregulated Childcare, CBS
12 News (Sept. 17, 2024), https://cbs12.com/news/local/i-team-the-
risks-of-unregulated-childcare-palm-beach-county-riviera-beach-health-
department-daycare-tuesday-september-17-2024; Unlicensed Daycare
Operator Charged with Aggravated Battery to a Child: Crystal Lake
Police, NBC Chicago (Apr. 19, 2024), https://www.nbcchicago.com/news/
local/unlicensed-daycare-operator-charged-with-
aggravated-battery-to-a-child-crystal-lake-police/3415880/; Tony Sloan,
Nashville Woman Charged in Death of 6-Month-Old Left in Her Unlicensed
Daycare, News Channel 5 Nashville (Mar. 27, 2025), https://
www.newschannel5.com/news/nashville-woman-charged-in-death-of-6-month-
old-left-in-her-unlicensed-daycare.
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As the costs of care increase and become more unaffordable
for more families, the burden of providing care services will
fall disproportionately on women.\25\ The early days of the
COVID-19 pandemic are a cautionary tale: when school closures
and the collapse of child care infrastructure increased
families' child care burdens, more women than men were forced
to leave the labor force,\26\ and many of these working mothers
never returned to the workforce full-time.\27\ The impact has
been disproportionately felt in industries traditionally
powered by women, including health care, education, and child
care.\28\ For the child care industry in particular, the
existing crisis triggered by the COVID-19 pandemic has devolved
into a vicious cycle--absent accessible child care, mothers
cannot return to work even if they want to, and the child care
workforce will shrink further, making child care even less
accessible.\29\
---------------------------------------------------------------------------
\25\Nathan M. Stall et al., Unpaid Family Caregiving--The Next
Frontier of Gender Equity in a Postpandemic Future, JAMA Health Forum
(June 9, 2023), https://jamanetwork.com/journals/jama-health-forum/
fullarticle/2805890.
\26\Christine Michel Carter, Five Years Later, Working Mothers
Continue to Leave the Workforce, Forbes (Mar. 29, 2025), https://
www.forbes.com/sites/christinecarter/2025/03/29/five-years-later-
working-mothers-continue-to-leave-the-workforce/.
\27\Id.
\28\Id.
\29\Id.
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A Mirage of Benefits
To the extent that the bill actually incentivizes employers
to provide child and dependent care subsidies or services, it
is not clear that employers would make a meaningful investment.
Nothing in the bill requires employers to provide care benefits
commensurate to the actual cost of such care. A worker might
accept a meager care subsidy as better than nothing even if it
falls significantly short of the cost of care. The employer,
meanwhile, would be able to enjoy 1.5 times as much in avoided
overtime pay expenses.
Any talk of child care or elder care in relation to this
bill is just a mirage. This bill does not address the cost of
dependent care and has no mechanism to bring that cost down.
Better Solutions
If the Majority is serious about tackling child and elder
care costs for working families, better solutions are
available. The Majority could start by looking at existing law,
which already sets up modest incentives for child and dependent
care. Employers who provide child care services directly can
deduct fringe benefits as an ordinary cost of doing business,
and there are additional tax preferences for these child and
dependent care benefits.\30\ Simply expanding these tax code
incentives could make a meaningful difference without
encouraging overwork.
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\30\Internal Rev. Svc., Pub. 503, Child And Dependent Care Expenses
(2024), https://www.irs.gov/publications/p503; Linda Smith et al.,
Bipartisan Pol. Ctr., The Employer-Provided Child Tax Credit (45F)
(Nov. 2022), https://bipartisanpolicy.org/download/?file=/wp-content/
uploads/2022/11/WEB_BPC_ECI-45F-Explainer_R01.pdf; Gov't Accountability
Off., GAO-22-105264, Employer-Provided Child Care Credit: Estimated
Claims and Factors Limiting Wider Use (Feb. 2022), https://www.gao.gov/
assets/gao-22-105264.pdf.
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But there is clearly a need to do more. The Child Care for
Working Families Act, slated to be reintroduced again this
Congress, would ensure families across America can find and
afford the child care they need, dramatically expand access to
high-quality preschool programs, and boost wages for early
childhood workers.\31\ Under the legislation, which Ranking
Member Scott and Sen. Patty Murray (D-WA) have introduced every
Congress since 2017, the typical family in America will pay no
more than $10 a day for child care--with many families paying
nothing at all--and no eligible family will pay more than 7% of
the family's income on child care.
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\31\See, e.g., H.R. 2976, 118th Cong. (2023).
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Republican Attacks on Working Families
Although likely to be sold as demonstrating the softer side
of the Republican Majority, this bill is a fig leaf barely
covering the Republicans' naked assault on working families.
Head Start and other early child education programs on
which many working families rely are under attack. On April 1,
2025, five of 12 regional offices for the Office of Head Start,
within the Department of Health and Human Services (HHS), were
abruptly closed.\32\ The offices play a critical role,
assisting grantees with grant management, compliance with
health and safety regulations, and fiscal planning.\33\ In the
wake of the abrupt office closures, with grantees left
wondering whom to contact regarding grant renewals, the
National Head Start Association voiced its ``deep[] concern[]
about the potential disruption to vital services for eligible
children and families across the country.''\34\
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\32\Moriah Balingit, Mass Layoffs Rattle Head Start Leaders Already
on Edge Over Funding Problems, AP (Apr. 2, 2025), https://apnews.com/
article/head-start-office-closures-hhs-trump-
00b1a6b33ef918cb66e59b7ffb07ac1.
\33\NHSA Expresses Deep Concern Over Administration Shuttering
Regional Offices, Nat'l Head Start Assoc'n (Apr. 1, 2025), https://
nhsa.org/press_release/nhsa-expresses-deep-concern-over-administration-
shuttering-regional-offices/.
\34\Id.
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This comes after mass layoffs at the Administration for
Children and Families (ACF), also within HHS, which have
reduced staff by as much as 38 percent in recent weeks.\35\
ACF's Office of Child Care administers the Child Care
Development Fund (CCDF), which provided child care subsidies
for 1.8 million children in fiscal year 2021 (the most recent
year for which data is available).\36\ CCDF subsidies play a
crucial role in defining health and safety requirements for
child care providers across states, ensuring parents have
transparent information about the child care choices available
to them, and helping eligible families make ends meet.\37\
Attacks on CCDF and the ability of Head Start to administer
services constrain already limited capacity for oversight and
risk leaving children less safe and affordable child care out
of reach for families in need.
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\35\Jonathan Cohn, Trump's Next Target: Poverty-Stricken Kids, The
Bulwark (Apr. 6, 2025), https://www.thebulwark.com/p/trump-next-target-
poverty-stricken-kids-hhs-head-start-early-childhood-child-care-
education-programs-federal-cuts.
\36\Id.; Nina Chen, Off. of the Assistant Sec'y for Plan. &
Evaluation, Off. of Hum. Servs. Pol'y, Estimates of Child Care Subsidy
Eligibility & Receipt for Fiscal Year 2021 (Sep. 11, 2024), https://
aspe.hhs.gov/reports/child-care-eligibility-fy2021.
\37\Office of Child Care, Admin. for Children & Fams. (Mar. 7,
2024), https://acf.gov/office-child-care.
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The layoffs presage complete elimination of these programs.
The news media recently published a leaked document that
appears to be the Office of Management and Budget's
``passback'' instructions to the Department for Health and
Human Services as it prepares its components of the President's
annual budget submission.\38\ In it, Head Start is proposed to
be completely eliminated, along with many other valuable
programs supporting working families.
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\38\See Jeremy Faust, Scoop: Leaked PDF Outlines Major HHS
Restructuring Proposal (Authenticity Now Confirmed). ``The Safety Nets
Are Being Blown Up Right and Left.'', Inside Med. (Apr. 16, 2025),
https://insidemedicine.substack.com/p/scoop-leaked-pdf-outlines-major-
hhs.
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Medicaid also has a target on its back. The budget
resolution passed by both the House and the Senate--supported
by nearly the entire House Republican Conference\39\--directs
the House Energy and Commerce Committee to cut $880 billion
over ten years, which is expected to primarily come from cuts
to Medicaid.\40\ Medicaid is a vital source of health coverage
in the United States--including for workers--covering 1 in 5
people and 41 percent of births nationally.\41\ Medicaid cuts
will negatively impact people across the country, with
disproportionate impacts for poorer states as well as
individuals in rural areas and Black, Latino, and Indigenous
people.\42\ Moreover, Medicaid is the largest payer for long-
term care services for seniors.\43\ At the same time that
Republicans are purporting to care about access to elder care,
they are threatening the very program that pays for this care,
only to extend tax cuts for the top 1 percent.\44\
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\39\H. Con. Res. 14, 119th Cong. (2025).
\40\Sharon Parrott, House Republican Budget Would Mean Higher
Costs, Less Help for Families, More Tax Windfalls for Wealthy, Ctr. on
Budget & Pol'y Priorities, at 2 (Feb. 12, 2025), https://www.cbpp.org/
sites/default/files/2-12-25bud-stmt.pdf.
\41\Alice Burns et al., 10 Things to Know About Medicaid, KFF (Feb.
18, 2025), https://www.kff.org/medicaid/issue-brief/10-things-to-know-
about-medicaid/.
\42\See Parrott, supra note 40.
\43\See Burns, supra note 41.
\44\See Parrott, supra note 40.
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CONCLUSION
For the reasons stated above, Committee Democrats
unanimously opposed H.R. 2270 when the Committee on Education
and Workforce considered it on April 9, 2025. We urge the House
of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Joe Courtney,
Suzanne Bonamici,
Mark Takano,
Mark DeSaulnier,
Summer Lee,
John Mannion,
Yassamin Ansari,
Members of Congress.
[all]