According to court documents, Apple employees are required to clock out before submitting to an exit search which can take from five to 20 minutes.
On the busiest days, employees say the wait time can be as long as 45 minutes. Those who refuse to have their belongings searched are subject to discipline, including termination.
A lower court had previously sided with Apple, ruling that time spent by employees waiting for the exit searches cannot be considered "hours worked" under California law.
The plaintiffs escalated the case to the Ninth Circuit Court of Appeals which asked the Supreme Court to address the state law issue.
The state's high court in its decision issued on Thursday rejected Apple's argument that its employees could easily avoid a search by choosing not to bring a bag or iPhone to work.
Quoting from a US Supreme Court decision, it noted that cell phones are "now such a pervasive and insistent part of daily life that the proverbial visitor from Mars might conclude they were an important feature of human anatomy."
"The irony and inconsistency of Apple's argument must be noted," the court added.
"Its characterization of the iPhone as unnecessary for its own employees is directly at odds with its description of the iPhone as an 'integrated and integral' part of the lives of everyone else."
Apple representatives could not immediately be reached for comment on the ruling.
The Apple case is the third the state high court has considered in recent years as related to minimum wage and time during which workers are under employers' control.
In 2018, the court ruled that Starbucks has to pay for off-the-clock work -- such as going through the checklist for closing the store -- that can last a few seconds or minutes past someone's shift.
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