The happiest place on earth may not be very happy after their recent audit by the Department of Labor (DOL)! During the audit, the DOL discovered Disney was deducting costume expenses without the employee’s authorization and taking them below the federal minimum wage of $7.25.
They were not paying employees for pre and post-shift work. Disney is now responsible for compensating these employees for back pay and costume deductions in the amount of $3.8 million, affecting 16,339 employees. You may think this is pocket change to such a large corporation, but now that Disney has been flagged by the Department of Labor, you can guarantee they will be on their watch list.
How can you prevent this from happening to your company?
To avoid this mistake, make sure employees are signing deduction authorization forms; employees must be aware and give consent to any deductions and the reasoning behind it. It is important to understand that employers cannot pay employees less than the federal minimum wage to compensate for the deduction. Employers should also make sure to compensate employees for all hours worked, inside and outside of your facility.