Apple's overtime dodge is common practice — are you being cheated?Engineer David Walsh has brought suit against his employer, Apple, alleging that the company misclassified him and others as exempt from overtime pay. The practice is endemic across California, especially at startups. Local labor laws set a high bar for exempting employees from overtime pay, and non-exempt employees can become very expensive for companies which demand workaholic schedules. I was misclassified years ago when working as a Web producer for Williams-Sonoma and got a nice settlement check after a visit from the National Labor Relations Board. The notorious "EA Spouse" blogger helped shake up labor practices across the entire videogame industry. While stuck at your desk missing your legally required meal break, read below to see if you're exempt or non-exempt:
  • If you're an employee who's paid hourly and has filled out a W-2 form, you are probably non-exempt. In which case, you are entitled to time-and-a-half after eight hours in a day or the first eight hours on the seventh continuous day and beyond, and double-time after twelve hours in a day or eight hours on the seventh continuous day.
  • For salaried workers, there are three classes of exemption. If you are an "executive," you are exempt from overtime. Executives are involved in the management of the company, have at least two subordinates reporting to them directly, have the power to hire and fire employees or recommend such actions and are allowed to make independent decisions that impact the business.
  • The "administrator" exemption only applies in cases where an employee is administering the business affairs of a company, directly assists a proprietor or executive, or works independently and exercises discretion on non-manual tasks that involve special skill or technical expertise. However, if you're in the process of producing goods and services that the company sells, you're probably not exempt. This class of exemption is often abused.
  • The "professional" exemption is one that's often abused at technology companies, because accredited engineers or others doing "learned or artistic" creative or intellectual work is exempted — but only if they make over twice the state's full-time minimum wage in salary, which is over $33,000 a year. And this is meant to apply to individuals, not entire classes of employees at a company (hence the quantity of class-action suits when companies apply the exemption too broadly).
Now you can see why employers prefer to hire independent contractors, for whom none of the above rules apply. Also, just because you're receiving a few stock options in no way exempts you from the national Fair Labor Standards Act which set these guidelines. And while discretion is a must when taking up the issue with human resources, rest assured that you'll be in for an even bigger payday from the courts if your employer fires you in retribution for attempting to clarify and enforce the rules. (Photo by Richard Masoner)