Disney World to pay $3.8 Million back to workers over federal minimum wage and overtime labor violations

Disney is again cited for numerous labor violations by the U.S. Dept. of Labor
affecting its resort, hotel, and time share workers in Disney World
Lately, Disney is earning a dubious reputation of being one of the worst employers in the country to work for, whether the issue is underpaying its employees, not being paid for time and inconvenience for being scheduled to be on-call for work during their employees' personal time off of work, unscrupulously replacing American workers with foreign visa holders on U.S. soil, or being subject to violations of existing labor laws for anti-competitive behavior to prevent outside career opportunities for Disney employees in the labor market.

Now, the U.S. Department of Labor has found that Disney violated numerous federal wage and labor laws for deducting a "uniform or costume" expense from the paychecks of its resort, hotel and time resort workers at Walt Disney World, causing their effective wages to fall below the federal minimum wage rate, which is set at $7.25 per hour.



The federal Labor Department also said that Disney failed to pay employees overtime for mandatory pre- and post-shift work duties they performed 15 minutes before and after they officially clocked in and out of work (such as logging on and off computers and signing in and out keys), and the resort failed to adequately record required time and payroll records for these compensable pre- and post-shift overtime work activities. 


Disney will be forced to pay back a total of $3.8 million in back wages to the cast members affected by the agreement to ensure compliance with the Fair Labor Standards Act (FLSA), by July 31, 2017, according to the U.S. Labor Department's press release issued today. 

Disney has a long history of labor violations going back to the
early days of Walt himself
Investigators from the U.S. Department of Labor have told us in confidence that Disney required cast members to clock in at least 15 minutes ahead of their official shift start time, with a grace period of 5 minute before or after this pre-shift start time.

Thus with the grace period, some cast members may have been even clocking in 20 minutes before their official shift start times with Disney getting 20 minutes of extra work from their staff without having to pay them. Because of these kinds of systematic labor abuses, it's no wonder the U.S. DoL had to step in.

The settlement affect some 16,339 Florida Disney resort, hotel and time share workers from two of Disney's subsidiaries, Walt Disney Parks & Resorts and Disney Vacation Club Management Corporation, in Walt Disney World. The settlement averages out to be about $233 in back pay per employee. 

There is no word, so far, if any other third-party civil litigation (such as a class-action lawsuit as a recently settled on in California, Stella Jaime, et al. v. Walt Disney Parks & Resorts U.S., Inc.) is pending on the matter against Disney, or if the same issues affect Disney's other resort and theme park operations in the U.S., such as in Anaheim, California, Port Canaveral, Florida, or Kapolei, Hawaii.

However, we already have confirmation from cast members inside the Disneyland Resort in Anaheim, California, that Disney still requires its cast members working at the theme parks and hotels there to retrieve keys before and after clocking in and out of their scheduled shifts, which is the same situation as that in Florida and will likely be investigated by the Labor Department for the same exact violations substantiated in Florida.

Also since virtually all Disney hourly employees are required to be in some form of costume or uniform before clocking into their scheduled shifts, that activity of dressing into a uniform or costume as part of their required work duties may also be considered a compensable overtime activity that Disney had previously not compensated virtually all their workers for. (See Fox 13 Tampa video below.)


We are told that the key access by Disney employees is recorded on an automated, computerized key control system, which may be used as evidence against Disneyland management since they did not pay cast members overtime for the pre-shift requirement to retrieve keys before clocking into work.


The Labor Department would not elaborate on what prompted the investigation, but a good guess is that a whistleblower working at Disney's Old Key West Resort filed a formal complaint with the federal agency back before 2013. Disney's main hotel workers union, Unite Here, could not be reached for comment on the matter to verify if this is in fact true.


The reason we believe this is because the initial complaint originally covered almost 700 employees from Disney World's Old Key West Resort, which was filed nearly four years ago, back in November 2013, but since that time, an additional 15,500 employees were added by the Labor Department to cover the complaint since January 2015.


The settlement also calls for increased training of managers about what constitutes "compensable work time," including recording times for mandatory employee pre- and post-shift duties, such as signing in and out keys and logging on and off computers, before and after a scheduled shift.
    

"[T]he Department of Labor has identified a group of cast members who may have performed work outside of their scheduled shift," Disney said in a statement, "and we will be providing a one-time payment to resolve this. We are adjusting our procedures to avoid this in the future.”


It appears, however, Disney will have to revisit some of the exact same issues of federal labor violations in its California theme parks and resort operations.


For more information about federal wage laws administered by the Wage and Hour Division of the U.S. Department of Labor or to file a labor complaint, call the agency's toll-free helpline at 866-4US-WAGE (487-9243). Information also is available at http://www.dol.gov/whd/.

   

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