A lawsuit accused Google of failing to correctly calculate its hourly employees’ overtime pay by excluding the value of vested restricted stock units and sign-on bonuses. Now, a settlement worth $8.369 million has been reached to compensate those workers. We take a look at what Google did wrong and what employees need to know about their overtime rights.
Google’s improper exclusion of vested stocks
A lawsuit representing more than 6,500 hourly Google employees throughout the country accused the company of neglecting to include all forms of employee compensation when it calculated workers’ overtime rate of pay. Specifically, the lawsuit alleged, Google did not include the value of vested restricted stock units (RSUs) and sign-on bonuses.
With some exceptions, any type of compensation – not just direct wages – must be included when determining how much overtime to pay an employee. By omitting these non-wage forms of compensation, the lawsuit contends, Google effectively paid hourly workers less than what the law requires.
Who is covered by the settlement?
On March 13, the federal district court for the Northern District of California approved a settlement of $8.369 million between Google and over 6,500 hourly employees from across the United States.
Non-exempt employees (meaning, workers who are required to be paid overtime) who worked for Google between December 22, 2018 and June 5, 2022, and who were awarded restricted stock units that vested during that period and/or received a sign-on bonus during that period, will be paid from the settlement. For employees in California, the start date extends back to December 22, 2017. “Vested” is a term that essentially means the point at which the stock or other benefit is earned by the employee.
The above-mentioned California class members are automatically included in the settlement. Meanwhile, those employees outside of California will receive a special notice by mail and email that gives them the chance to join the settlement. To do so, these workers must submit a Consent to Join form to the settlement administrator by June 5, 2023. The court overseeing the case will hold a final approval hearing on July 27, 2023 to ensure the settlement reasonably compensates employees.
Are you being paid everything you’re entitled to?
The Google lawsuit serves as a reminder to all workers to make sure their overtime has been correctly computed. Many workers fail to read their pay stubs and other records and check the number of hours and hourly rate to ensure they were paid the right amount.
Employers must pay most hourly workers time and a half for any hours worked above 40 during a work week. “Time and a half” means 1.5 times the worker’s regular rate of pay. The problem, however, is that in determining the regular rate of pay, many employers incorrectly leave out non-wage forms of compensation. This was the case with Google when it left out the value of vested RSUs and sign-on bonuses.
The Fair Labor Standards Act (FLSA) is the main federal law that requires workers to be paid overtime. State and local laws sometimes offer even more overtime benefits to workers. Any time there is a difference between federal and state/local rules, the one which is more advantageous to the worker prevails.
There are plenty of ways, besides what Google did, that employers deny their employees overtime. Some examples are:
- Improperly applying one of the FLSA overtime exemptions
- Requiring an employee to work “off the clock” (before or after a shift) without crediting the time
- Paying a day-rate and no overtime
- Automatically deducting a meal break from an employee’s pay, even if the employee worked
- Averaging hours across more than one week
- Violating state or local overtime rules, which may be more favorable to workers
Don’t Let Anyone Take Away Your Right to Overtime
If your employer is not including RSUs or other non-wage compensation in your overtime rate or is denying you overtime in some other way, The Lore Law Firm can assist you. Our nationwide network of attorneys regularly advises and represents workers in various overtime and wage disputes. Complete our free and confidential intake form to learn more.