At a glance
- The Ombudsman stated that equal pay applies to all forms of compensation, including Restricted Stock Units (RSU), irrespective of when they are paid or who is making the payment.
- RSU are considered part of compensation and must adhere to equal pay standards.
- The Ombudsman stressed the importance of employers offering clear and objective criteria for granting incentives such as RSUs.
The Ombudsman for equality has issued a statement regarding gender equality and employee rewarding concerning RSU.
A non-birthing employee had been on parental leave for nine months shortly after the employer’s financial year 2022 had ended. The employee was not awarded RSU for 2022. According to the employer, RSUs are not considered part of an employee’s compensation but rather long-term incentives aimed at investing in key employees. The employer claimed that the employee’s performance did not warrant RSUs, even if the employee had not taken parental leave.
The Ombudsman clarified that equal pay standards apply to all components of compensation, including various forms of payment for work performed, whether in cash or benefits, regardless of when the payment is made or who is responsible for it. Therefore, RSUs fall under the equal pay umbrella. While incentive plan terms can be flexible, employers must provide objective criteria for denying an employee such incentives. Transparency in these criteria is crucial.
In this case, the Ombudsman determined that the employer discriminated against the employee due to unclear criteria for awarding RSUs and inconsistent evidence regarding the employee’s performance during their parental leave.
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