Even large companies sometimes learn the hard way when it comes to Fair Labor Standards Act (FLSA) compliance. The Department of Labor (DOL) recently reached a $3.8 million settlement with Walt Disney Company after finding that the large Florida employer violated minimum wage, overtime, and record keeping provisions for over sixteen-thousand employees. The violations related to uniform payroll deductions which resulted in some employees receiving less than the Federal minimum wage. Additionally, employees were not compensated for time spent performing mandatory duties at the beginning and end of shifts. As is commonly the case, the primary violations also resulted in a record keeping violation.
The Florida based company could have faced greater penalties if the employees were located in a different state. Florida generally allows employers to deduct uniform costs from an employees pay. The DOL could only recover the differene between the employees pay after the uniform deductions and the applicable minimum wage. However, other states, such as California require that employers bear the cost for mandatory uniforms.
Click here for the full news release from the DOL.