Recent settlement illustrates the cost of evading minimum wage laws

California has one of the highest minimum wages in the country. It was raised to $16.50 at the beginning of this year. A number of cities within the state, including San Diego, have even higher minimum wages, largely due to their cost of living.

Another one of those cities is Anaheim. Its minimum hourly wage is $20.50 as of the beginning of this year. Even a company as large as Disney can’t ignore the law – as a $233 million dollar settlement announced at the end of last year proved. The settlement is being called the largest wage theft settlement in the state’s history.

What is Measure L?

The matter goes back to a ballot proposition, Measure L, that Anaheim voters approved in 2018. It required that companies entitled to tax rebates from the city pay their employees at least the city’s 2019 minimum wage of $15 beginning at the start of the year. The measure specified minimum wage increases for the upcoming years.

That included the “Disneyland Resort District.” Disneyland has been the leading attraction in Anaheim since it opened 70 years ago in 1955. However, the company argued that it wasn’t subject to Measure L minimum wage requirements because the Anaheim City Council canceled its long-held tax rebate agreements in 2018.

This refusal to abide by the minimum wage requirement came amid a devastating report that many Disneyland employees weren’t earning a living wage. Employees took legal action via a class action suit that Disney fought up to the California Supreme Court (which chose not to hear the case), but ultimately didn’t prevail.

What’s included in the settlement?

The settlement requires Disney to give more than $100 million in back pay to over 50,000 current and former employees that they’re owed from Jan. 2019 forward. The settlement amount also includes penalties, fees and interest. In December of last year, a Disney spokesperson stated that all “cast members,” as they’re known, were earning “at least the Measure L requirement” and that “95% of them make more.”

When employers don’t abide by the appropriate minimum wage laws, it can ultimately be very costly and harmful to their reputation. However, getting employers of any size to abide by the law often requires employees to know the law and effectively assert their rights. Having experienced legal guidance is typically a good first step in seeking fair pay.