Two subsidiaries of The Walt Disney Co. have agreed to pay $3.8 million in back wages to resort and timeshare employees, the U.S. Labor Department announced Friday.

Disney subsidaries to pay $3.8 million in back wages

Federal officials said the Labor Department found wage and overtime violations

"Costume" expense was deducted from some employees hourly rates



Federal officials say the department’s Wage and Hour Division found violations of minimum wage, overtime and record-keeping provisions.

As part of the agreement, back wages will be paid to 16,339 workers of Walt Disney Parks and Resorts U.S. Inc. and the Disney Vacation Club Management Corp, both in Florida.

According to investigators, Disney resorts in Florida deducted a “costume” expense that caused some employees hourly rates to fall below the federal minimum wage. In addition to not maintaining required time and payroll records, the company did not properly pay employees who performed duties before and after their designated shifts, the department 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, including any time they work before or after their scheduled shifts,” said Daniel White, district director for the Wage and Hour Division in Jacksonville. "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."

Disney was cooperative throughout the investigation, White said.

The U.S. Labor Department did not say what prompted the investigation.

