The Walt Disney Co. will pay $3.8 million in back wages to more than 16,000 employees to resolve a U.S. Labor Department investigation.

The labor department found that Disney used a costume expense to deduct wages from employees, causing some to fall under federal minimum wage. Besides not maintaining proper payroll records, the company also didn’t pay employees for required pre-shift and post-shift duties.

The 16,339 employees will receive checks by July 31 from Disney that will average to about $233 per worker. The affected employees include 700 who worked at the Old Key West Resort since November 2013. Another 15,000 employees that worked at other Disney resorts in Florida since January 2015 will also be compensated.

The agreement calls for increased training of managers about what constitutes “compensable work time.” The training will include activities like signing out keys and logging onto computers.

“These violations are not uncommon and are found in other industries as well,” Daniel White, district director for the Wage and Hour Division in Jacksonville, said in a statement. “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.”

 

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