Apple is being brought to court once again, this time for allegedly attempting to lower its labor costs by classifying its call center employees as independent contractors. Apple contracted Arise Virtual Solutions to act as the hiring agency for Apple which allowed Apple to avoid claiming the call center personnel as Apple employees. In so doing, Apple allegedly avoided paying for employee training, business expenses, social security, Medicare, unemployment insurance, worker’s compensation insurance, and the employer’s share of tax payments to the federal and state governments. Apple, instead, allegedly placed the burden of these expenses on the employees.
The plaintiff alleges that he and the other call center employees were required, as a condition of their employment, to form a separate Virtual Services Corporation which allegedly acted as a shell corporation in order to shield Apple from its liability for business related expenses.
Apple allegedly controlled every part of the work conducted by the call center personnel, providing the approved scripts for calls, order forms, and report formats. Neither the call center employees nor Arise were allowed to use any initiative or judgment in controlling the work of the call center employees. Apple had to approve all changes. All training materials were provided to Arise by Apple at no cost to Arise, although Arise charged the employees for training. All of the work of the call center employees was allegedly incorporated by Apple into the organizational structure of the Apple enterprise so that customers calling were led to reasonably believe that they were speaking with Apple employees and Apple allegedly instructed the call center employees to answer the calls as employees of Apple. The call center employees were also allegedly precluded from working for Apple’s competitors and were only paid a fraction of the total sum paid by Apple to Arise.
Upon hire, employees were allegedly led to believe that the position was capable of paying 28 cents per talking minute. But Apple allegedly had a system in which the employees were paid between $12 an hour and $15 an hour while logged onto Apple’s software system “Softphone”. Allegedly, employees were paid only for time spent actually on the phone with a customer or logged into the system as “Available Call Mode”.
The primary job of the call center employees was and is to provide customer support services to Apple customers including, among other things, technical and billing support. On a daily basis, these technical services included researching Apple products in order to help their customers and corresponding with the customers and Apple through e-mail. Because the call center employees had to log out of “Softphone” in order to conduct their research and e-mail, they were allegedly not paid for the time they spent performing these tasks. The employees were also allegedly not paid for their time spent researching updates on Apple products on “ApplePedia” (which was a daily task required of them in order to remain informed and up-to-date on Apple products) or time spent on Apple’s online training courses.
The training schedule for the class members is allegedly set by Apple. Upon hire, the class members allegedly are required to pay for and attend Apple’s mandatory training Monday through Friday for more than four hours each day, not including the time spent studying for the next day’s activities. Apple’s mandatory training allegedly lasts more than three weeks and the employees were not paid for any of this time.
The U.S. Department of Labor has devised a test which helps determine whether a person is an employee or an independent contractor.
The Department of Labor has determined the most significant factor to be whether the employer has control or the right to control the work performed and the manner and means in which the work is performed. Apple allegedly controls both of these and so the call center personnel were misclassified.
Jason Hilton, a call center employee with Apple since February 2009, has filed a class action lawsuit against the company on behalf of himself and a nationwide class of individuals who “were paid directly or indirectly by Apple by and through Apple agents to provide customer service and technical support by handling inbound customer calls of Apple customers and who performed this work for Apple away from Apple offices who are or were directly or indirectly classified by Apple as an independent contractor of Apple in the U.S. at any time during the period beginning four years prior to the filing of this complaint and ending on the date as determined by the Court”.
The class is seeking unpaid minimum wages, unpaid overtime, social security, Medicare, unemployment insurance, worker’s compensation insurance, and the employer’s share of tax payments to the federal and state governments plus penalties and interest, as well as an injunction against Apple against engaging in these or any unlawful or unfair business practices in the future.
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