The Walt Disney Co is charged with violation of labor acts and the company has agreed to pay $3.8 million in back wages. This will go to the hotel and resort workers who have been paid below the minimum wages. The scam was uncovered by the US Labor Department as it started the investigation of violation of minimum wage, record-keeping rules, and over time. The back wages will be paid to 16,339 employees who were affected. On an average, each worker will get $233.
The employees hired by Disney were asked to work for additional 15 minutes before and after shifts. However, Disney failed to compensate the workers for the extra time involved. Aside from this, the uniform expense was also deducted from the wages of all employees. This deduction resulted in hourly rates falling below the minimum wage set by the federal government. The resort was incompetent in maintaining proper work records for the number of hours worked by some employees. The US Labor Department declined to comment on the reason behind the investigation.
Disney announced in a statement that the Department of Labor had uncovered some cast members who worked outside their shifts but were not compensated. The company said that it would make a one-time payment to settle the dispute. Disney has also announced that it will change the procedures to avoid such a problem in the future. Disney was asked to pay the back wages before July 31st.
In the Florida resort, the cast members not only bake under the sun in their uniforms but are also expected to pay for it. The Fair Labor Standards Act (FLSA) allows an employer to ask the employee to pay for the uniform, but Disney did not pay attention to the fact that the deduction reduced the hourly wages below $7.25.
Denial White, the District director of the Department of Labor commented that such violations are rampant in other industries as well. Employees are required to maintain accurate records of the hours their employees work. Also, employers can’t pay below the minimum wage. Apart from the workers of Florida resort, cast members of New England, South Carolina, and Minnesota were also paid below the minimum wage. Disney also failed to pay for the overtime shifts because proper records were not maintained.
Despite the controversy, the Department of Labor (DoL) commented that Disney was very cooperative with the investigation. The company is also keen on ensuring that the employees get the compensation they deserve. This issue sheds light on the suffering of low paid workers due to wage thefts. Reports show that 89% of fast food workers become victims of wage theft. According to DoL data, labor code violation cases have gone down to 206. However, experts say that this is due to reduced number of reports and not due to improvements in working conditions. Disney is setting an example of ensuring that the wages are paid properly as it has included manager training to understand compensable work time properly.