Text: S.2323 — 106th Congress (1999-2000)All Information (Except Text)

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Public Law No: 106-202 (05/18/2000)

 
[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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