Tech workers lose overtime pay under RSU carve-out

What it does

This bill clarifies that restricted stock units (RSUs)—a common form of employee equity compensation—should be excluded from overtime pay calculations, just like stock options and employee stock purchase plans already are. The bill argues that RSUs were not explicitly mentioned in the 2000 law only because they weren't common then, and Congress intended the law to cover all equity types. The effect is that when calculating overtime pay, employers can ignore the value of RSUs granted to employees.

Why we flagged it

The bill mechanically narrows the wage base used to calculate overtime pay for a specific class of compensation (RSUs). While framed as a technical clarification, it functions as a wage reduction for workers receiving equity compensation.

What the text implies

• Workers at tech companies and growth-stage firms—where RSU compensation is prevalent—will see reduced overtime pay without any change to their actual work hours or effort. A worker earning $50k salary + $30k in RSUs annually will have overtime calculated on $50k, not $80k.
• The bill retroactively reinterprets legislative intent from a 2000 law (Worker Economic Opportunity Act) to reach a conclusion that was not explicit in that law's text. This sets a precedent for reinterpreting old statutes to accommodate modern compensation structures in ways that reduce worker protections.
• Employers gain a direct financial incentive to shift compensation from cash wages to RSUs, since RSU value is now excluded from overtime calculations. This may accelerate the trend toward equity-heavy compensation packages, which are less liquid and more volatile for workers than cash.
• The 90-day effective date means the change applies immediately upon enactment, with no grandfathering or transition period for existing RSU grants or employment agreements.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary employees lose money. By excluding RSU value from overtime calculations, workers who receive RSUs as part of their compensation package will have their overtime pay calculated on a smaller base, reducing what they owe for hours worked over 40 per week. This is a direct wage reduction for affected workers, particularly hourly and salaried employees at tech and growth companies where RSUs are common.

Who stands to gain

• technology companies (Meta, Google, Apple, Microsoft, etc.)
• growth-stage startups with RSU-heavy compensation
• venture-backed firms
• any employer using RSUs as part of compensation strategy

Named in the bill

Fair Labor Standards Act of 1938, Worker Economic Opportunity Act of 2000 (Public Law 106-202), House Committee on Education and Workforce, restricted stock units (RSUs), stock options, employee stock purchase programs, overtime compensation, regular rate

Where it stands

1 cosponsor: 1 Republicans.

• May 4, 2026 — Introduced · Congress.gov: “Introduced in House”
• May 4, 2026 — Referred to House Committee on Education and Workforce · Congress.gov: “Referred to the House Committee on Education and Workforce”
• Jul 21, 2026 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Jul 21, 2026 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 18 - 15”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.