Disney Settles Labor Violations

Two subsidiaries of Walt Disney Co. will pay $3.8 million in back wages by July 31 to thousands of their employees in the hotel and resort industries. The U.S. Labor Department has found them guilty of violating various labor rules such as minimum wage, overtime as well as record keeping rules. The subsidiaries involved are Disney Vacation Club Management Corp., and Walt Disney Parks and Resorts U.S. Inc.

The investigation of the U.S. Labor Department also included Disney’s Old Key West Resort and Fort Wilderness Resort & Campground, which are both near Orlando, Florida.

A Walt Disney World Resort spokeswoman said, “The Department of Labor has identified a group of cast members who may have performed work outside of their scheduled shift, and we will be providing a one-time payment to resolve this.”

The $3.8 million in back wages will be given to 16,339 employees. This calculates to around $233 per worker. This agreement in back wages includes almost 700 employees who were employed in Old Key West Resort since November 2013. The other 15,000 employees are from other Florida resorts and have worked since January 2015.

Daniel White, district director for the Labor Department’s wage and hour division in Jacksonville, said, “Employers cannot make deductions that take workers below the minimum wage and must accurately track and pay for all the hours their employees work. We hope the resolution of this case alerts other employers who may be paying employees in a similar manner so that they too can correct their practices and operate in compliance with the law.”

The investigation of the U.S. Labor Department showed that the company did not pay them for 15 minutes of work before and after shifts. They also found out that Disney was deducting a uniform expense and costumes expense which led to some hourly rates to be less than the federal minimum wage. Another clear labor violation of Disney was failing to maintain records of how many hours of work were done by their employees.

Seth Harris, Obama’s secretary of labor, said, “This is a very large amount of money, but even more important because a large number of workers were involved. This case is another illustration of the fact that wage and hour enforcement is just as critical today as it has ever been.”

According to Paul De Camp who was in charge of the wage and hour division during President W. Bush’s administration, the issues highlighted in this Disney case which are incorrect record-keeping, unpaid work before or after the shift of an employee are fairly common and often arise in employment law enforcement.

Disney has agreed to adjust their work procedures to avoid this kind of situation. Within 30 days, Disney will also boost the training of their managers into time logging matters such as what constitutes “compensable work time.” They will also train their manager’s basic computer literacy skills like logging in and out of computers.
Disney cooperated well with the Department of Labor throughout the investigation.