Faith, trust, and pixie dust can’t get Disney out of this pickle
Disney gets a lot of praise for the way they manage their company. (Heck, they’ve practically written the book on customer satisfaction.) But not even the happiest, most magical place on earth is exempt from making serious (and seriously expensive) mistakes when it comes to complying with the Fair Labor Standards Act (FLSA).
Earlier this month, two subsidiaries of The Walt Disney Co. (Disney Vacation Club Management Corp. and Walt Disney Parks and Resorts U.S. Inc. — both located in sunny Florida) agreed to pay $3.8 million in back wages to more than 16,000 Disney employees due to minimum wage, overtime, and record-keeping FLSA violations (read the full press release here).
The resorts were deducting a uniform or costume expense from employee paychecks that caused some employees’ hourly rates to fall below the federal minimum wage.
Additionally, many employees claimed they weren’t being compensated for performing work duties before or after their designated shifts.
Worst of all, the resorts failed to maintain the time and payroll records required by the FLSA.
(Hey, TSheets can help with that! Give us a call, Disney.)
“These violations are not uncommon and are found in other industries, as well. Employers cannot make deductions that take workers below the minimum wage and must accurately track and pay for all the hours their employees work, including any time they work before or after their scheduled shifts.
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.
The Disney resorts were very cooperative throughout the investigative process and worked with the division to ensure employees received the pay they earned.”
— Daniel White, district director for the Wage and Hour Division in Jacksonville
So, yes, Disney violated the FLSA … in a major way. But you can still take a page out of the Disney management book by learning from their mistake, taking the necessary steps to ensure FLSA compliance in your own business, and reacting appropriately if you are hit with an FLSA lawsuit.
Not sure where to start? TSheets has all the resources you need for FLSA compliance.
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Not sure if your time and payroll records are up to FLSA standards? TSheets can help!
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