Bill cuts overtime pay by excluding child care from wage calculations

What it does

This bill amends the Fair Labor Standards Act to exclude employer-provided child and dependent care services and payments from the calculation of overtime compensation. Under current law, when computing whether an employee has worked overtime and what overtime pay is owed, employers must count all compensation received. This bill carves out child care and elder care benefits—meaning employers can provide these services or reimburse employees for them without those benefits counting toward the overtime threshold, effectively reducing the overtime pay owed.

Why we flagged it

The bill's operative mechanism is to shrink the wage base used to calculate overtime pay by excluding a category of employer-provided benefit. This directly reduces overtime compensation owed to workers, functioning as a labor-cost reduction for employers.

What the text implies

• Employers have incentive to substitute child care benefits for wages to reduce overtime liability—workers receive the same nominal benefit but lose overtime premium on that value.
• The exclusion applies retroactively to workweeks beginning on or after enactment (December 18, 2025), potentially affecting overtime calculations for work already performed.
• Workers in industries with high overtime (hospitality, healthcare, retail) and high child care costs (urban areas, dual-income families) bear disproportionate impact.
• The bill does not require employers to actually provide child care—it only excludes the value IF provided, creating no affirmative obligation while reducing overtime liability.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Workers lose overtime compensation when employers provide or reimburse child care instead of wages. An employee receiving $500/week in wages plus $200 in child care reimbursement currently counts the full $700 toward overtime thresholds; under this bill, only the $500 counts, reducing overtime pay owed. This is a direct reduction in worker compensation, particularly affecting lower-wage workers and parents who rely on employer child care support.

Who stands to gain

• employers with high-overtime workforces
• industries reliant on overtime labor (hospitality, healthcare, retail, logistics)

Named in the bill

Fair Labor Standards Act of 1938, Section 7(e), House Committee on Education and Workforce, 119th Congress

Where it stands

8 cosponsors: 7 Republicans, 1 Democrats.

• Mar 21, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 21, 2025 — Referred to House Committee on Education and Workforce · Congress.gov: “Referred to the House Committee on Education and Workforce”
• Apr 9, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Apr 9, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 18 - 13”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

3 lobbying clients named this bill on 4 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $18,795,000 in lobbying spend. A filing names 60 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 61% of bills with at least one filing.

Mark Messmer, the sponsor, reported $487,000 in PAC receipts in the 2026 cycle.

• Chamber of Commerce of the U.S.A. — $17,960,000 on 1 filing
• AFL-CIO — $760,000 on 1 filing
• Small Business & Entrepreneurship Council (sbe Council) — $75,000 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.