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A recently filed lawsuit accuses Apple of failing to include the value of restricted stock awards (RSUs) when calculating the overtime pay rate for its hourly employees. Companies must include all compensation when determining such rates, and they can be held liable for violating overtime laws if they don’t. If your employer isn’t correctly computing the amount of overtime you are owed, we can help.

The Complaint Against Apple

In the lawsuit, filed on March 23rd by a former Apple employee, the plaintiff states that hourly workers were compensated with RSUs in addition to wages. However, when determining its employees’ rate of overtime pay, the technology giant did not include the value of vested RSUs. “Vested” refers to the point at which the stock is actually earned by the employee. By excluding the stock, which is a form of employee compensation, the complaint alleges that Apple was able to pay a lower overtime wage than what was required by law.

The plaintiff is seeking unpaid overtime compensation as well as liquidated (double) damages for any workers whose overtime rights were denied. It is believed that many employees across the country may have been impacted by Apple’s exclusion of RSUs from overtime calculation.

Understanding Your Right to Overtime Pay

The lawsuit in question was filed pursuant to the Fair Labor Standards Act (FLSA). The FLSA is the main federal law that governs overtime pay for all non-exempt employees in the United States. In general, hourly workers must be paid overtime, or time and a half, for all hours worked over 40 during a week. Employers generally must include all forms of compensation (with few exceptions) when it calculates its employees’ overtime pay rates.

Some hourly employees are not covered by overtime laws, but they are relatively few in number. That means most hourly workers will be entitled to overtime if they work more than 40 hours in a week. If your employer claims that you are exempt from overtime, it must be able to substantiate that claim with a specific exemption provided by law.

Common Ways that Employers Cheat Employees Out of Overtime

The Apple lawsuit highlights the fact that employers routinely deny their workers the overtime pay to which they are entitled. Not all employees fully understand their right to overtime, and employers are often more than willing to take advantage of this. These are just some of the other ways that employers violate overtime protections:

  • Improper use of an exemption. Remember, the burden is on employers to understand and correctly apply any overtime exemptions to their employees. Exemptions are narrowly construed and the employer can be held liable for improperly using them as an excuse not to pay overtime.
  • Not paying overtime to non-hourly employees. Hourly workers are not the only kind that are entitled to overtime. For instance, to be exempt, a salaried worker must be paid a weekly minimum salary and his or her job duties must qualify for a specific exemption.
  • Averaging hours over two or more weeks. Under the FLSA, every work week stands alone. Employers are not allowed to average hours across more than one week and then pay only straight time (the regular rate of pay) for them.
  • Violating state overtime laws. States are free to set their own overtime rules, as long as they meet at least the basics of the FLSA. Many state and local governments, therefore, have overtime rules that are even more generous toward workers, and those requirements will apply where there is a discrepancy.

Making Sure You Receive All Overtime Pay Required By Law

There are many other ways that employers can cheat their workers out of overtime pay. If, as in the case with Apple, your employer is not including all forms of compensation when determining your pay rate, it’s time to seek legal counsel. Fill out The Lore Law Firm’s free and confidential client intake form to get started.

Michael Lore is the founder of The Lore Law Firm. For over 25 years, his law practice and experience extend from representing individuals in all aspects of labor & employment law, with a concentration in class and collective actions seeking to recover unpaid back overtime wages, to matters involving executive severance negotiations, non-compete provisions and serious personal injury (work and non-work related). He has handled matters both in the state and federal courts nationwide as well as via related administrative agencies. If you have any questions about this article, you can contact Michael by using our chat functionality.