Disney Vacation Club Management Corp. and Walt Disney Parks and Resorts U.S. Inc. have agreed to pay $3.8 million dollars in unpaid wages to over 16,000 of its employees. The settlement includes compensation for many workers at its beloved Florida theme parks who received hourly wages below the legal minimum. According to an article in The Boston Globe, the US Labor Department announced March 17th that the company also “failed to compensate employees for duties performed before the designated start of their shifts and failed to maintain accurate payroll records.”
In addition to paying the settlement amount, Disney has agreed to begin training all managers, supervisors, and non-exempt employees at its resorts on “what constitutes compensable work time and the need to accurately record such time.”
The Fair Labor Standards Act (FLSA) sets the national minimum wage at $7.25. Many states have a separate minimum wage, including New York, which is higher than the federal one and can never be lower. The highest applicable minimum wage is the amount employers must pay eligible employees.
According to the US Department of Labor (DOL), the FLSA also states that employers are, at times, allowed to deduct money from their workers’ wages.
It is not uncommon for a company like Disney, to ask employees to cover the cost of their costumes/uniforms. The DOL, however, makes it clear that an employer may not deduct money for a uniform if doing so drives hourly wages below the minimum wage for a given work week. The amount of the deduction may be pro-rated over several weeks if it will avoid dropping wages under the legal threshold.
If the worker’s wage is exactly the minimum wage, any deduction will always drop the rate below the minimum. In this instance, the employer may not deduct the cost of the uniform from the employee’s wages.
There is a distinction between deducting money from a paycheck and demanding reimbursement. The DOL states, “Employers may not avoid FLSA minimum wage and overtime requirements by having the employee reimburse the employer for the cost of such items in lieu of deducting the cost from the employee’s wages.”
In other words, if I earn the lowest hourly minimum wage, my employer can’t legally deduct the cost of my uniform. Nor can my employer demand that I pay in cash for it.
In the matter against Disney, the company deducted the cost of costumes from some employees’ wages. Doing so resulted in an hourly rate below the minimum wage threshold in violation of the FLSA. Those employees will receive compensation to cover their unpaid wages.
Disney also allegedly violated overtime provisions of the FLSA that requires payment of time and a half for all hours worked over 40 in a workweek. The DOL claims that Disney failed to count time workers spent on “duties performed before the designated start of their shifts.” Compensable time includes all time spent working, even if the work is done outside of your regular shift. The failure to consider this time as part of employees’ compensable hours, resulted in unpaid overtime for many of the Disney employees.
In a written statement, Daniel White, district director for the Labor Department’s wage-hour division in Jacksonville, Florida summed up the situation perfectly when he said, “‘Employers cannot make deductions that take workers below the minimum wage and must accurately track and pay for all the hours their employees work.’’
Employees are protected by the FLSA and state laws that demand workers receive fair pay for all hours worked. Wages and overtime belong to employees. You should be keeping everything to which you are legally entitled.
Contact unpaid wage attorneys, representing clients in New York City, Long Island and the surrounding towns, for a free consultation. Leeds Brown Law, P.C. has vast experience handling a full range of wage, overtime, and employment law cases. Call us at 1-800-585-4658 today and learn more about your workplace rights.