Empowering Employer Child and Elder Care Solutions Act
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Would exclude the value of employer-provided child or dependent care benefits from the calculation used to determine an employee's overtime pay rate under the Fair Labor Standards Act.
The change is meant to let employers offer child and elder care benefits without those benefits raising the regular rate used to compute overtime, potentially encouraging more employers to offer such care benefits.
What this bill would do
What it would do
The bill would amend the Fair Labor Standards Act of 1938 so that payments, reimbursements, or the value of child or dependent care services provided by an employer would not count toward an employee's "regular rate" of pay when calculating overtime compensation. Currently, the regular rate used to compute time-and-a-half overtime pay must include most forms of employee compensation; this bill would add child and dependent care benefits to the list of exclusions already allowed under the law, such as certain bonuses and benefit plan contributions.
The bill only changes how the overtime rate is calculated when an employer provides these care benefits; it does not require employers to offer child or dependent care, does not change the overtime rate itself (still time-and-a-half), and does not affect any other component of pay used in the calculation.
Key provisions
- 1Would exclude payments or reimbursements for child or dependent care services from the regular rate of pay used to calculate overtime
- 2Would add a new exclusion for the value of any child or dependent care services provided by an employer, alongside existing regular-rate exclusions
- 3Would apply the changes to overtime compensation for workweeks beginning on or after the bill's enactment
Who would be affected
Employers that provide or are considering providing child or dependent care benefits to employees, and hourly or non-exempt workers whose overtime pay is calculated under the Fair Labor Standards Act. It also affects Department of Labor wage-and-hour enforcement, which administers the overtime rules the bill would amend.
Why it matters
For employers, the change would lower the cost of offering child or elder care benefits, since doing so would no longer increase the overtime rate they must pay. For employees, take-home overtime pay could be modestly affected if employer-provided care benefits are excluded from the regular-rate calculation, even as they gain access to a potentially more common workplace benefit.
What would change
Changes to existing law
Amends Fair Labor Standards Act of 1938 (29 U.S.C. 207(e)) (Sec. 2)
Adds child/dependent care payments, reimbursements, and services to the list of items excluded from the regular rate used to compute overtime pay.
Agencies directed to act
Effective dates
- The overtime regular-rate exclusion for child and dependent care benefits
Funding and costs
Congressional Budget Office estimate
CBO estimates that H.R. 2270 would have no significant effect on the federal budget, as it would exclude employer payments or reimbursements for child and dependent care services from the calculation of overtime compensation under the Fair Labor Standards Act.
H.R. 2270 would amend the Fair Labor Standards Act (FLSA) to exclude payments or reimbursements for child and dependent care services from the computation of overtime compensation for employees. Because the bill affects how overtime pay is calculated rather than directing federal spending or changing tax revenues, CBO found no significant budgetary impact on direct spending or revenues. The CBO publication page did not identify intergovernmental or private-sector mandates exceeding statutory thresholds. The bill was ordered reported by the House Committee on Education and the Workforce on April 9, 2025.
How implementation would work
The change would take effect automatically upon enactment for workweeks beginning on or after that date, without requiring new agency rulemaking to trigger it, though the Department of Labor's Wage and Hour Division—which enforces the Fair Labor Standards Act's overtime provisions—would need to update its compliance guidance and enforcement practices to reflect the new exclusion when determining whether employers have correctly calculated regular rates of pay for overtime purposes.
Legislative status & sources
Latest action
POSTPONED PROCEEDINGS - Pursuant to clause 1(c) of rule XIX, the Chair announced that further proceedings on H.R. 2270 is postponed.
Official CRS summary
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This bill excludes the value of employer-funded child or dependent care from being used in calculating an eligible employee's overtime pay.
Under current law, overtime hours must be paid at one and a half times an employee's regular rate of pay. This rate is an average hourly rate that must include certain types of pay, such as commissions. The bill specifies that an employer can provide or pay for child or dependent care services without the value of the services being included in this calculation.
Legislative subjects
Child care and development; Family services; Labor and Employment; Labor standards; Wages and earnings
Committee report
H. Rept. 119-413