Disney's $3.8 million labor violation: Costumes push paychecks below minimum wage
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A job at 鈥淭he Happiest Place on Earth鈥 isn鈥檛 all smiles.
The Disney World employees who play Goofy, Mickey, and other iconic characters don鈥檛 just have to spend long hours in their costumes under the Florida sun. According to the US Department of Labor (DoL), they were on the hook for those costumes.
has found that 鈥淒isney resorts in Florida deducted a uniform or 鈥榗ostume鈥 expense that caused some employees鈥 hourly rates to fall below the federal minimum wage.鈥 Under the federal Fair Labor Standards Act (FLSA), to bear the cost of a uniform 鈥 but not so much that it pushes the employee鈥檚 wages below $7.25 per hour, the federal minimum.
That鈥檚 what happened at Disney World, along with failure to keep required payroll records and requiring employees to perform uncompensated pre- and post-shift duties. Disney has agreed to pay 16,339 of its 鈥渃ast members鈥 a total of $3.8 million in back wages.
As 鈥淔ight for $15鈥 and other groups continue their struggle to raise the minimum wage, this case makes clear that low-income workers face other obstacles on the road to higher take-home pay. Practices like Disney鈥檚 regularly push workers鈥 paychecks below the amounts required by law.
鈥淭hese violations are not uncommon and are found in other industries, as well,鈥 Daniel White, district director for the Labor Department Wage and Hour Division in Jacksonville, . 鈥淓mployers cannot make deductions that take workers below the minimum wage and must accurately track and pay for all the hours their employees work.鈥
Outside Florida, in recent months businesses in , , and got in trouble with the DoL when uniform deductions pushed employees鈥 wages below $7.25 per hour. In most of these cases, as with Disney鈥檚, uniform charges went hand-in-hand with other violations, including failing to pay employees for overtime.
Nationwide, 鈥淣early nine in 10 (89%) fast food workers report that they have been the victim of wage theft at their fast food job, and most have experienced multiple forms of wage theft鈥 鈥 including deductions for uniform expenses.
But the workers at places such as Disney World may be faring better than the fast-food workers that have served as the face of the low-wage worker movement. that the number of labor code violations in the 鈥淎musement鈥 sector has been trending down in recent years, from 507 in 2001 to 206 last year.
Part of that drop may be due to a decrease in reporting, rather than improved working conditions, and the 鈥淗otels and Motels鈥 sector actually showed an increase over the same period. But the DoL鈥檚 Mr. White made clear that 鈥渢he Disney resorts were very cooperative throughout the investigative process,鈥 and Disney said that 鈥淲e are adjusting our procedures to avoid this in the future.鈥
An end to workplace abuses at, say, a single McDonald鈥檚 restaurant is less likely to have 鈥渞ipple effects鈥 than a workplace settlement in Disney鈥檚 vast enterprise. That鈥檚 because the fast-food industry leaves most day-to-day store operations in the hands of franchisees and managers.
Last September,
"Worker advocates say there鈥檚 a persistent problem of fast-food managers feeling pressured to cut labor costs, and that the franchise business structure plays a role. Stores run by owners of multiple outlets might be especially prone to cheating workers, [attorney] Michael Hancock ... told Bloomberg BNA.鈥
鈥溾榃hen you鈥檙e in a low-margin business like fast food, there鈥檚 always going to be pressure to find ways to cut costs...Part of what鈥檚 driving noncompliance is that at the ground level, these managers are given a labor budget鈥 that is unnecessarily low and 鈥榯hat pushes them in some cases to cheat.鈥欌
But regardless of the organization鈥檚 management structure 鈥 or whether the "uniform" is a polo shirt or Cinderella dress 鈥 Mr. Hancock has some straightforward tips for employers to stay on the right side of the law.
鈥淗ave a decent time-keeping system; make sure that people get paid $7.25 for every hour they worked; if they go over 40, give them another half-time,鈥 he told Bloomberg. 鈥淭hat鈥檚 not that complicated.鈥
[Editor's note:听This article has been updated to specify that Ben Penn reports for Bloomberg BNA.]