The U.S. Department of Labor investigation found Disney in violation of the air Labor Standards Act. The labor department found Disney in violation of U.S. minimum wage standards, overtime compensation, and bookkeeping provisions, it reports.
The $3.8 million will be given to almost 17,000 employees who are owed back wages. Reportedly, the company did not keep track of times employees were considered “clocked in”, and also did not pay employees for work activities before and after their shifts. The biggest problem was the costume deduction. As disney employees pay for their own uniform, it is docked from their paycheck, making Disney’s paychecks below the minimum wage.
The Daily Caller reports:
Walt Disney Co. has agreed to pay $3.8 million in back wages, after a U.S. Department of Labor investigation found the company in violation of the Fair Labor Standards Act.
Some 16,339 hotel and time-share management employees will receive a portion of the near $4 million pay out. The Labor Department’s Wage and Hour Division found Disney in violation of U.S. minimum wage standards, overtime compensation, and bookkeeping provisions, it reports.
Resort employees incurred a uniform, or “costume,” deduction from their paychecks, causing their hourly compensation to fall below the federal minimum wage. Disney resorts also reportedly did not pay employees for work-related activities performed before and after their designated shift. Management failed to keep any time or payroll records.
Defending the company’s practices, Disney leadership released a statement, saying: “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. We are adjusting our procedures to avoid this in the future.”
District Director for the Wage and Hour Division in Jacksonville, Daniel White, said that violations Disney was found guilty of “are not uncommon and are found in other industries, as well.” “The Disney resorts were very cooperative throughout the investigative process and worked with the division to ensure employees received the pay they earned.”
The employees will receive their back pay no later than July 31.