A California appellate court ruling that determined Disney illegally avoided paying its employees at least $15 an hour could mean a pay increase of nearly $20 per hour.
Anaheim, CAMore than 25,000 Disney employees will see a pay increase following a California appellate court ruling in July that said Walt Disney Parks must follow Anaheim city law and pay its Disneyland Resort employees a living wage.
California Minimum Wage
As of 2023, the minimum wage rate for all employers in California is $15.50. The last five years saw the California minimum wage increase by more than 40 percent, from $11 per hour. Many cities in California, including San Francisco, and Emeryville have minimum wages that are already significantly higher than the state minimum, and 12 states plus Washington, D.C. automatically tie minimum wage increases to the cost of living. Walt Disney Park workers will receive an immediate increase to a minimum $17 an hour, which will rise to $18 an hour by the end of 2023. Then, over the next three years, workers will see additional increases of $2.50 to $5.60 per hour.
Disney Workers’ Lawsuit
A lawsuit filed in 2019 by a handful of current and former Disneyland employees argued that Disney didn’t abide by a 2018 voter-approved living wage measure called Measure L, which requires Anaheim resort businesses that receive tax subsidies and their subcontractors to pay employees a living wage. When the lawsuit was filed that living wage was $15 an hour. Unions representing Disneyland employees backed the measure. The Disney employees argued in the lawsuit that Anaheim is using tax dollars to pay off construction bonds for the Mickey and Friends parking garage. The Los Angeles Times explained that most of the taxes come from Disney, while the rest comes from hotel bed taxes. The lawsuit contended that Disney keeps revenue from the parking garage and will own it once construction costs are paid back.
According to the lawsuit, “All this was paid for with what Disney would have otherwise paid in taxes…The money Anaheim gave Disney was raised by the issuance of municipal bonds. The bonds are repaid with and secured by Disney taxes. Further, “Instead of going to the City for general purposes, almost all of Disney’s transient occupancy, sales and real property taxes go to payments on the bonds, which will not be paid off until 2036. Disney got a rebate of the best kind: it got its taxes back before it paid them.”
Disney and Anaheim contended that the parking garage agreement does not constitute a subsidy under Measure L. Disney agreed that if there was any year in which the city’s incremental tax revenues failed to meet its bond obligations, Disney would make up the shortfall. Additionally, the parties agreed Disney would be reimbursed for its shortfall payments in those years when the city’s incremental tax revenues rebounded.
Inside the Magic in 2021 reported that Orange County Superior Court Judge William D. Claster granted a summary judgment in favor of the Disneyland Resort. But a three-judge panel for California’s Fourth Appellate District disagreed with Judge Claster and last month ruled that Disney is bound by the terms of the city’s Living Wage Ordinance (LWO), noting that Disney receives a city subsidy within the meaning of the living wage ordinance and it is therefore obligated to pay its employees the designated minimum wages. The judges reversed the trial court’s order granting Disney and (food service contractor) Sodexo’s motion for summary judgment.
The plaintiffs’ attorneys said, “The ruling is a monumental victory for Disney workers, who have been fighting for better wages and benefits,” and “Disney’s ongoing refusal to pay more than 25,000 employees a living wage has resulted in this case becoming one of the largest living wage class action lawsuits.”
According to the Daily Pilot, a February 2018 report cited Disneyland employees as having high instances of homelessness, low wages and food insecurity. The report was compiled for the Coalition of Resort Labor Unions by researchers at Occidental College and the Los Angeles-based Economic Roundtable. The Coalition reported that more than 85% of union workers at Disneyland earned less than $15 an hour at the time of the 2018 report, which was released prior to the approval of Measure L.
The Disney Anaheim class action lawsuit is Grace et al. v. The Walt Disney Co. et al., Case No. G061004, in the Court of Appeal for the State of California, Fourth Appellate District.
Meanwhile, Disney CEO Bob Iger will earn up to $27 million a year, according to a 2022 SEC filing. With a base pay of $1 million, he can receive an additional $1 million bonus based on his performance. Iger is also entitled to a long-term incentive award with a target of $25 million. Last month the Walt Disney Co. said Iger’s contract had been extended through 2026. In a recent CNBC interview, Iger criticized the demands of writers and actors, saying, “There’s a level of expectation that they have that is just not realistic.” Is Iger’s salary realistic?
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