Through direct advocacy of the CHRO Association, Representative Ryan Mackenzie (R-PA), Chair of the House Education and Workforce Subcommittee on Workforce Protections, introduced the Valuing Employee Stock Today Act, legislation that would provide a technical amendment to bring restricted stock units in line with other forms of equity compensation under the FLSA federal wage-and-hour law.
What it means: If passed, employers would be free to offer equity grants to hourly workers without fear of being sued for overtime pay.
What the Act Signifies: The legislation makes two targeted amendments to FLSA Section 7(e)(8).
- Adds “restricted stock unit program” alongside the “bona fide employee stock purchase program” in the list of equity compensation excluded from the regular rate calculation.
- Updates the trigger language from “exercise” to “exercise or acceptance” to accurately reflect how RSUs are actually received — through vesting and acceptance, not a traditional option exercise.
What Comes Next: The Association is building momentum behind the bill on several fronts:
- Hill meetings to educate Members of Congress and their staff on the need for this fix to garner co-sponsors for the bill.
- Senate companion legislation: The Association is working to identify a Senate sponsor to introduce a parallel bill.
- An employer sign-on letter to demonstrate broad industry support.
If your organization would like to be included in this effort, we would love to have your support! Please reach out to Chatrane Birbal at [email protected].
