Most employers know that wage and hour claims are some of the most common legal issues they will face. Even though they are common, they can lead to serious issues and risks for companies.
A recent case involving Apple showcases only one example of the effect these cases can have – even when it boils down to one seemingly unrelated policy.
Apple ordered to pay employees for missed wages
In 2013, two employees of Apple retail stores filed lawsuits to recover lost pay due to off-the-clock-bag checks. The policy was to ensure employees did not carry any company products or trade secrets out of the store, but these bag checks could take up to 20 minutes each day. This totaled up to over an hour of unpaid work each week.
In February 2020, the California Supreme Court ruled that Apple would have to reimburse employees for this time. After all, the employees were still under the employer’s control during the checks.
Apple appealed the ruling. But in September, the U.S. Court of Appeals for the Ninth Circuit maintained that Apple had to give back-pay to employees for the time spent checking their bags. According to Observer, this ruling will require Apple to repay a total of $60 million in missed wages.
Two critical issues employers must note
It is clear to see that the execution of this policy led to significant legal and financial consequences for Apple. Finding a resolution for this case also took a considerable amount of time away from business matters.
However, there are two primary subjects that are especially important for employers to understand from this case:
- Know the law: Employers must review federal and California wage and hour laws, as well as keep up to date with any relevant changes that could impact their business. It is an employer’s responsibility to ensure that their policies and pay practices comply with these rules to avoid wage and hour lawsuits.
- Review policies at all levels: Additionally, employers must also make sure they are fully aware of the policies enforced at every level of their company. Observer reported that Apple’s CEO, Tim Cook, was not aware of the bag-check policy until employees filed complaints with him directly. Employers should take measures to avoid this mistake and ensure policies are enforced fairly and identically throughout every level of the business.
Mitigating the risk of wage and hour lawsuits is possible, but employers must be vigilant when it comes to creating and enforcing policies that comply with the law.