Apple pays $500K to make sales bods' complaint about wage theft go away

Apple has agreed to settle a lawsuit brought by salespeople who claimed the iPhone giant underpaid them for overtime work and failed to cover expenses when traveling on business.

Without admitting any wrongdoing, Apple has agreed [PDF] to pay $500,000 to resolve the lawsuit. California federal district Judge Vince Chhabria approved the settlement on Thursday, which accounts for about four minutes of Apple's latest quarterly profits [PDF] of $19.9 billion.

The two sales bods' complaint [PDF], filed July 2022, and subsequently amended [PDF], claimed Apple failed to pay "solutions consultants" – salespeople who sold Apple products at third-party stores such as those run by AT&T, Best Buy, T-Mobile US, and Verizon – for all the hours they worked.

Apple allegedly failed to take into account sales commissions when calculating their overtime pay, which is higher than their regular pay rate: Apple is basically accused of not paying the full overtime rate. The iBiz also, it's claimed, did not pay salespeople for all the hours they worked.

"For example, Apple has engaged in an unlawful pattern or practice of denying earned overtime to its solutions consultants by requiring them to begin their workday at home via online video conferences, to clock out after these video conferences were complete, and to then travel to their work site location, ie, next job assignment, without being paid for their time in transit," the amended complaint, brought by Anthony Foreman and Connor Sleighter on behalf of their fellow sales folks, contended.

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The Economic Policy Institute, a non-profit advocacy group, calls underpayment of this sort "wage theft." In 2021, the organization reported that more than $3 billion in stolen wages were recovered on behalf of workers by the US Department of Labor, state departments of labor, and attorneys general, and through class and collective action litigation.

"Wage theft occurs any time employees do not receive wages to which they are legally entitled for their labor," the EPI said in its report. "This could take many forms, including paying workers less than the minimum wage, not paying overtime premiums to workers who work more than 40 hours a week, or asking employees to work 'off the clock' before or after their shifts."

Apple denied these allegations. And the August 16, 2023 motion [PDF] for settlement approval suggests the plaintiffs were overly broad in their claims, based on discovery materials that indicated Apple paid commission-adjusted overtime late rather than not at all.

"In particular, Apple’s production of comprehensive earning statements on the eve of mediation confirmed that it retroactively paid a regular rate to Solutions Consultants that included earned commissions between one to two pay periods after the Solutions Consultants performed that work," the settlement motion says.

"This shifted the question from whether Solutions Consultants were still owed unpaid overtime wages including earned commissions, to whether Solutions Consultants are owed liquidated damages because Apple allegedly did not make these retroactive overtime payments in the same pay period that Solutions Consultants earned these commissions."

The motion also indicates that at least some solution consultants, including lead solution consultants, were paid for travel time.

Apple did not respond to a request for comment. ®