Worker Economic Opportunity Act
PL 106-202 (S.2323), enacted 05/18/2000

114 STAT. 308 
PUBLIC LAW 106-202—MAY 18, 2000 
Public Law 106-202 
106th Congress 
An Act 
May 18, 2000 
To amend the Fair Labor Standards Act of 1938 to clarify the treatment of stock 
[S. 2323] 
options under the Act. 
Be it enacted by the Senate and House of Representatives 
of 
Worker Economic the United States of America in Congress assembled, 
Opportunity Act. 
29 u s e 201 note. 
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), lay 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 pro-
gram which is not otherwise excludable under any of para-
graphs (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 partici-
pation 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 estab-
lished 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 
PUBLIC LAW 106-202—MAY 18, 2000 
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 fol-
lowing: 
"(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 
29 use 207 note, 
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 
29 use 207 note. 
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 appre-
ciation 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 
29 use 207 note, 
such regulations as may be necessary to carry out the amendments 
made by this Act. 
Approved May 18, 2000. 
LEGISLATIVE HISTORY—S. 2323: 
CONGRESSIONAL RECORD, Vol 146 (2000): 
Apr. 12, considered and passed Senate. 
May 3, considered and passed House.