If employers provide dependent care services, should they also pay full overtime?

Labor, Jobs, and Commerce Social Welfare
Empowering Employer Child and Elder Care Solutions Act (H.R. 2270)
Awaiting Vote
Bill Summary

The Empowering Employer Child and Elder Care Solutions Act will change the criterion used to determine an employee’s overtime compensation to exclude child and dependent care services funded by the employer. Although the employer can still pay for child and dependent care services, such benefits would not be calculated as part of the worker’s overtime pay. If passed, the bill would require an amendment to the Fair Labor Standards Act of 1938. Sponsor: Rep. Mark B. Messmer (Republican, Indiana, District 8)
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Opponents say

•      "Mr. Speaker, I rise in opposition to H.R. 2270, the Empowering Employer Child and Elder Care Solutions Act. Unfortunately, it doesn’t solve anything. It doesn’t provide any additional child or elder care… Despite its name, the bill does not require employers to provide any child or elder care. Instead, it just reduces the cost of overtime if they provide it. That’s the problem. In practice, this bill encourages employers to keep workers on the job longer rather than expanding access to affordable care. It increases time away from families while offering no assurance that any support for child care will be provided. Workers who already receive these benefits will see their overtime pay reduced. There is no evidence that these workers who do not receive this benefit are likely to get the benefit. The only group we know for certain will be affected is those who already had it, and they will lose money on overtime." Source: Rep. Robert C. “Bobby” Scott (Democrat, Virginia, District 3), Ranking Member of Education & Workforce Committee Democrats


•      "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 cost… 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." Source: Education & Workforce Committee Democrats

Proponents say

•      "SBE Council strongly endorses H.R. 2270, the Empowering Employer Child and Elder Care Solutions Act... The more opportunities and tools that small business owners have to support their workforce, the stronger and more competitive their businesses become. Outdated and poorly aligned labor rules discourage small businesses from offering child and dependent care assistance due to unintended overtime cost penalties. This needs to be fixed so that small businesses can more practically provide child and dependent care benefits. H.R. 2270 fixes the flaw in federal law by clarifying that employer-provided child and dependent care payments and benefits are excluded from overtime pay calculations. This commonsense reform removes a disincentive that has limited the availability of important benefits. The reform will help small businesses improve and strengthen workforce participation and retention by addressing the challenges many employees face in finding affordable and reliable care." Source: Karen Kerrigan, Small Business & Entrepreneurship (SBE) Council President and CEO


•      "On behalf of AMAC Action… I am writing to voice our strong support for H.R. 2270, the Empowering Employer Child and Elder Care Solutions Act, legislation that modernizes federal labor policy to better reflect the realities facing today’s workers and employers. Across the country, employees are increasingly responsible for caring for young children, aging parents, and dependent family members while remaining active in the workforce… By reducing regulatory barriers, the legislation allows employers to voluntarily provide child and elder care benefits without facing financial penalties for doing so. Encouraging businesses to invest in family-supportive benefits strengthens both employees and employers. At a time when many families are struggling with rising costs, empowering employers to help meet caregiving needs is a practical step toward improving affordability and workforce participation. This legislation recognizes that a strong economy depends on policies that support working families and the businesses that employ them." Source: Andrew J. Mangione Jr., Senior Vice President of the Association of Mature American Citizens (AMAC) Action


•      "The Fair Labor Standards Act (FLSA) mandates that the value of child and dependent care benefits, such as on-site child care or child or dependent care payments, must be included in employees’ regular pay calculations. The value of these benefits is added in before calculating overtime, increasing the overtime pay owed by the employer. Child and dependent care assistance benefits are as critical to families as other employer-provided benefits – it makes no sense to limit accessibility to these crucial benefits with overly burdensome regulations. Americans shouldn’t have to choose between meeting work obligations and caring for loved ones… Rep. Mark Messmer’s legislation, H.R. 2270, the Empowering Child and Elder Care Solutions Act, lowers the cost and cuts the red tape for employers to offer child or dependent care assistance, treats these pro-family benefits similarly to other employer-provided benefits, and increases access to care for hardworking American families. House Republicans are ensuring employee access to child and dependent care assistance to provide peace of mind and bolster workforce retention and productivity. " Source: Rep. Steve Scalise (Republican, Louisiana, District 1), House Majority Leader

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