Flak Flies on DOL Position on Options and Overtime

The Department of Labor's opinion letter stating that a company had to count the spread on option exercises by hourly workers as wages subject to overtime pay has resulted in a predictable flurry of criticism. House Majority Leader Dick Armey (R-TX) and Representative John Boehner (R-OH), chair of the House Education and Labor Committee on Employer-Employee Relations, have both written letters to the Department saying that its position on this issue was bad policy. Privately, employer groups have met with DOL officials expressing the same view. Meanwhile, the DOL has launched a detailed investigation of the issue, and the NCEO has been working with them to provide background material.

Labor Secretary Alexis Hermann has stressed that the opinion letter applies only to the particular facts and circumstances of the case; it does not represent DOL policy. Some lawyers have also argued that with proper drafting, plans can avoid coming under the direction of the opinion letter.

For more details on this issue, see my previous column.