SAN FRANCISCO (CN) — A federal judge Tuesday tentatively ruled restricted stock units awarded to hourly Apple employees do not fall under federal exclusions that would allow the company to exclude the awards from employees’ regular rate of pay for the purposes of calculating overtime pay.
Restricted stock units (RSUs) are awards that give employees a contingent right to own company stock on a future date, subject to certain conditions. Vesting is the process an employee takes to earn ownership of the stock, such as waiting a certain amount of time or reaching a specific career level.
The plaintiffs, former and current Apple employees who were paid hourly and eligible for overtime, argue that, in addition to their hourly rate, they received restricted stock units as part of their compensation at Apple.
Under the Fair Labor Standards Act, and California and New York state law, employers are required to pay employees a higher rate of pay for overtime. The plaintiffs argue that employees’ regular rate of pay includes pay derived from other forms of compensation, such as restricted stock units.
They claim Apple’s policy of not including the value of restricted stock units in the regular rates of pay unlawfully underpays employees for overtime.
“When an employer pays employees with stock, unless it meets statutory requirements for exclusion, the value must be included in the regular rate when calculating overtime pay,” the plaintiffs say in their motion for summary judgment.
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