By Mary E. Drobka and Sarah A. Loble
The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued an opinion letter concluding that employee stock option gains need to be counted as compensation for the purpose of calculating overtime pay. The DOL letter was originally written on February 12, 1999, although the DOL did not release the letter until December 23, 1999.
The DOL's ruling could have the effect of making stock option programs for non-exempt workers much more expensive and complex for employers. Many employers may choose not to offer stock options to non-exempt employees rather than face such complexities. The result: Possibly no more millionaire administrative assistants who benefited from being let into stock option plans at the ground floor of start-up companies.
