Lawsuit Investigation for Unpaid Overtime Wages Due to Exclusion of Restricted Stock Units

• Overview
• What are Restriction Stock Units?
• Overtime Calculations and Restricted Stock Units
• What to Do If You Are Not Receiving Proper Overtime Pay
• Do I need to act now?
• About Berger Montague

Do you receive equity compensation, such as restricted stock units, as part of your compensation package?

Berger Montague PC is currently investigating potential claims against companies that may be denying proper overtime wages to non-exempt employees who receive restricted stock units (RSUs) as part of their compensation. Failure to include the value of vested RSUs when calculating overtime compensation may result in underpayment of overtime wages for employees who work more than 40 hours in a workweek.

What are Restricted Stock Units?

RSUs are a type of equity compensation that grants company stock to employees through a vesting plan—typically after the employee has remained with their employer for a certain amount of time or reached certain performance milestones. Once RSUs vest, the employee owns the shares and can sell or hold them, depending on the employer’s policies and any applicable trading restrictions. The fair market value of the shares on the vesting date is treated as ordinary income by the IRS for tax purposes.

Overtime Calculations and RSUs:

The Fair Labor Standards Act (FLSA) and many state wage and hour laws require covered, non-exempt employees receive overtime pay of at least one and one-half times their regular rate of pay for time worked in excess of 40 hours per workweek.  An employee’s “regular rate” includes all forms of non-discretionary compensation. An employee’s regular rate can be calculated by dividing the total pay they received in a workweek by the number of hours they worked. Their “time-and-a-half” overtime rate is then calculated by multiplying the regular rate by 1.5.

In certain circumstances, the value of vested RSUs can be considered non-discretionary incentive payments that must be included in the regular rate of pay on which overtime is based. This means that if a non-exempt employee works overtime during a period in which RSUs vest, their overtime rate for that period should reflect this income.

What to Do If You Are Not Receiving Proper Overtime Pay:

• Keep Accurate Records: Document all hours worked and keep your paystubs.

• Contact Us for a Free Consultation: If you received RSUs as part of your compensation and suspect your overtime pay may have been miscalculated, contact our experienced overtime attorneys for a free and confidential consultation. We will review your case and help you understand your rights under federal and state law.

Do I need to act now?

Yes, if you believe that you have not received the wages or overtime pay you deserve you should act as quickly as possible. Through statutes of limitations, the law limits the time you have to bring suit.   If you do not take legal action within the time provided by the applicable statute of limitations, some or all of your claims may be barred and recovery denied.

Under the federal Fair Labor Standards Act, you must file a claim for unpaid overtime wages within two years (three years if the violation was willful) from the date of the unpaid wages. For overtime claims, the longer you wait the less you may be able to recover in a lawsuit.

Berger Montague is one of the nation’s preeminent law firms focusing on complex civil litigation, class actions, and mass torts in federal and state courts throughout the United States. The firm is active in the fields of antitrust, commercial litigation, consumer protection, defective products, environmental law, employment law, securities, and whistleblower cases, among many other practice areas. For more than 55 years, Berger Montague has played lead roles in precedent-setting cases and has recovered over $50 billion for its clients and the classes they have represented. Berger Montague is headquartered in Philadelphia and has offices in Chicago, Minneapolis, San Diego, San Francisco, Toronto, Washington, D.C., and Wilmington, DE.