It's correct. In the case of Uber, the company withheld shares according to the supplemental wage withholding rules (22%) at the federal level. Employees would still be liable for the extra 10-15% of the IPO price if taxed in the highest tax bracket.
> withheld shares according to the supplemental wage withholding rules (22%) at the federal level
Is the difference refunded through tax returns?
Yes, though most Uber employees (and tech company employees in the SF Bay Area in general) are going to be above the 22% bracket, and thus will owe more tax instead of being owed a refund. This is especially likely if the employee is mostly vested and thus settling a large block of RSUs all at once.
It is true and I also find it amazing that the company seemingly did nothing other than withholding 22% (below1M$). It seems like the switch to RSUs did not take into account the downside risk.
> ... did not take into account the downside risk.