RSUs for Hourly Employees

What are RSUs?

RSUs are grants of stocks given to employees. Many large companies, including Netflix, NVIDIA, Doordash, Zillow, and Eventbrite, give this type of compensation to hourly employees. They’re called “restricted” because employees must meet certain conditions before earning the stock. Usually, that happens when you stay long enough at a company or meet specified performance goals.

Do RSUs impact my hourly compensation?

Yes. If you received RSUs, your employer is required to include the value of the RSUs when calculating your overtime rate. Under the Fair Labor Standards Act (FLSA), overtime is calculated as 1.5 times your regular rate of pay, which includes all forms of compensation. If vested RSUs were left out of your regular pay rate, you were paid less than you're entitled to under federal law.

Have questions?

This practice may be hard to uncover by looking at your paycheck, but it remains illegal. If you have questions about your legal rights and potential compensation, contact us today.

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