Bill cuts overtime pay by excluding child care from wage calculations
H.R. 2270 — Empowering Employer Child and Elder Care Solutions Act · Filed by Mark Messmer (R-IN) · 8 cosponsors · Introduced Mar 21, 2025 · Reported out
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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.
The full analysis lists 4 implications of this text.
Who stands to gain
employers with high-overtime workforces; industries reliant on overtime labor (hospitality, healthcare, retail, logistics)