[106th Congress Public Law 202]
[From the U.S. Government Printing Office]
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[DOCID: f:publ202.106]
[[Page 114 STAT. 308]]
Public Law 106-202
106th Congress
An Act
To <<NOTE: May 18, 2000 - [S. 2323]>> 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 <<NOTE: Worker Economic Opportunity
Act.>> assembled,
SECTION 1. SHORT TITLE. <<NOTE: 29 USC 201 note.>>
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
[[Page 114 STAT. 309]]
``(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 <<NOTE: 29 USC 207 note.>> 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 <<NOTE: 29 USC 207 note.>> 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) <<NOTE: 29 USC 207 note.>> Regulations.--The Secretary of Labor
may promulgate such regulations as may be necessary to carry out the
amendments made by this Act.
Approved May 18, 2000.
LEGISLATIVE HISTORY--S. 2323:
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CONGRESSIONAL RECORD, Vol. 146 (2000):
Apr. 12, considered and passed Senate.
May 3, considered and passed House.
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