Apple Must Pay 2 Million to Employees: Let’s Learn from its Mistakes
Keeping up with every applicable federal, state, and local employment law is no easy task for small business owners (unless you have CEDR, of course!) And a recent class action lawsuit against Apple, Inc. shows that even large multinational corporations seem to have just as much trouble following all the rules. Luckily, there are some easy lessons we can take away from this case, to prevent this happening in your practice.
Last month, Apple was ordered to pay $2 million after it lost an employee-filed class action lawsuit about California employment law violations. The employees suing Apple claimed the company failed to do the following:
- Apple didn’t provide timely paid rest breaks
- Apple didn’t provide timely meal breaks
- Apple didn’t provide final paychecks in a timely manner when employees left the company
Note the recurrence of the word “timely” here. The employees weren’t suing Apple for failing to provide breaks or final paychecks, but rather for not delivering these in a timely manner.
We’ll cover each of the violations Apple was found guilty of, explain where they ran into trouble, and what your practice can do differently to avoid your own employee claims or lawsuits down the road. And keep in mind, although you might not be in CA, many other states also have laws about rest breaks, meal periods, and final paychecks.
Not Providing Timely Paid Rest Breaks
There’s no federal requirement to provide paid rest breaks, although most employers do, and the FLSA does require that any breaks you do offer that are 20 minutes or less be paid. However, several states impose more stringent rules, and California’s laws are some of the strictest.
The employees suing Apple claimed that they regularly worked 6+ hours without being provided a rest break, and that they sometimes weren’t provided a 2nd or 3rd rest break. California law mandates that an employee be provided a 10-minute paid rest break for every 4 hours (or a “major fraction” of 4 hours) they work. A “major fraction” of 4 hours is considered anything more than 2 hours, but an employee needs to be scheduled to work at least 3.5 hours to qualify for a paid break.
Confused? Here’s a helpful chart showing how many breaks CA employees must be provided, broken down by number of hours worked:
3.5 hours – 6 hours = one 10-minute break
6+ hours – 10 hours = two 10-minute breaks
10+ hours – 14 hours = three 10-minute breaks
Note that rest breaks are different from meal periods, which must also be provided if the shift is long enough (see next section). Also, note that paid rest periods should be provided in the middle of each work period, to the extent that it is practicable to do so. That means no attempting to beat the system by lumping two or three rest periods together, or routinely scheduling breaks at the very beginning or end of a work period.
Even with careful scheduling, your employees are probably occasionally going to miss a break. This doesn’t have to be a catastrophe, but if you’re in California, you need to pay them for an extra hour of work as a “penalty.” One of the allegations in the recent Apple lawsuit is that Apple refused to compensate employees who missed their break with the extra hour of pay. If this is true, Apple could have saved itself quite a bit of money by simply providing the prescribed reparation to the employee.
Not Providing Timely Meal Breaks
Just like paid rest breaks, there is no federal law that imposes a meal break requirement, but many states do.
Meal breaks are separate from rest periods, and in California they must be provided after every 5 hours of work. That means if an employee works more than 10 hours in a day, CA employers must provide TWO meal breaks. Meal breaks need to be at least 30 minutes long.
The lawsuit again contended that Apple’s meal period policy prevented people from being able to take their lunch after working for 5 straight hours. Employees CAN waive their meal break, but the employer can’t force or encourage the employee to waive it (it has to be the employee’s idea).
If an employee misses their lunch, you can rectify the situation the same way as you would a missed break – the employee is simply owed an extra hour of pay at their regular rate.
Not Providing a Timely Final Paycheck
State laws differ, but at the minimum you must pay an employee’s last paycheck on or before the regular payday for the last pay period worked. In many states, you have far less time to issue a final paycheck. California law requires an employee to be paid immediately if they are fired or quit with 72 hours’ notice, or within 72 hours if they quit with less than 72 hours’ notice.
In the Apple case, not all the delays in question were enormous—one employee waited 27 days for their last paycheck, whereas another employee had to wait 2 days for their check. However, as evident by the lawsuit against Apple, even delaying for a day or two can produce unpleasant consequences.
Learning from Apple’s Failure
Again, this case occurred in California, and the labor laws Apple violated were entirely state laws, but the total bill was 2 million dollars! Not small pocket change, even for a company as big as Apple.
To avoid a fate similar to Apple’s, it’s critical to know what your state’s laws require (this is something we keep our members constantly up-to-date on). And when it comes to timely paychecks, keep in mind that the timeframe may be different for employees who quit with notice as opposed to those who were fired.
You may want to seek advice from an employment law expert and have your own employee policies reviewed for legal compliance. Our team of attorneys and HR/employment law experts can help you keep up with changing local, state and federal laws, so you’ll have no doubt about the right way to handle any HR issue.