Thousands sue Disneyland over low pay

Around 25,000 Disneyland workers are suing the company over low pay, taking part in a class-action lawsuit that claims that the employer is legally obliged to pay a minimum wage.

Gabriel Sarracino has worked at the Disneyland Hotel in Anaheim, southeast of Los Angeles in California, for 15 years as a valet, parking cars and helping visitors with their bags. During that time, he has been paid the minimum wage by Disney and has been using tips to increase his pay.

“We feel like there’s always somebody else that will fill our spot,” Mr Sarracino told SFGATE.

Company leadership recently decided that valets can’t take care of guests’ luggage, which has led to a decrease in Mr Sarracino’s tips.

“I couldn’t make it on minimum wage, which is how much they pay me,” Mr Sarracino said. “If they are going to make changes where I have less opportunity for tips, then that’s half my income [gone].”

Many employees are experiencing difficult living conditions as a result of their low pay from Disney, a survey of 5,000 workers has shown.

Occidental College and the Economic Roundtable published a 132-page survey of Disneyland resort employees in February 2018 called “Working for the Mouse”, which said that 11 per cent of employees had experienced homelessness within the previous two years because of the low pay. As many as 68 per cent struggled with food insecurity, with 73 per cent saying that they don’t make enough to cover basic living expenses.

Workers have said that they want to get second jobs, but Disneyland schedules them differently each week, making it difficult to take on a second gig.

Matt Bell, the secretary-treasurer of UFCW 324 – a union that represents 2,500 Disneyland shop employees – told SFGATE that the conditions that made life difficult for Disneyland workers in 2018 still exist today, three years later, and that it’s possibly worse than it was.

These conditions prompted the Orange County coordinator for union Unite Here Local 11, Austin Lynch, to start collecting signatures for what would become Measure L.

“The crux of the initiative was: if you are getting taxpayer subsidies in the resort area, then you should be paying a living wage,” Mr Lynch told SFGATE. “It was based on the reality that Disney has gotten hundreds of millions of dollars in tax giveaways over the years. In return, [they should] pay enough for people to live.”

The measure was voted into law in Anaheim in 2018 and says that a business that benefits from city subsidies has to raise their employees pay to at least $18 an hour by 2022, as well as increase the pay as the cost of living rises.

Mr Lynch said the initiative garnered 25,000 signatures in just two weeks.

Disneyland has agreed to a starting pay of $15 – California’s minimum wage is $14 for businesses with more than 26 people on its payroll.

“But there were several thousand employees left behind,” Mr Lynch said. “Some who were left out would have been covered by the law.”

This is why Disney employee unions have gathered workers to sue the company, arguing that the company is getting city subsidies and should have to follow Measure L.

The lawsuit gained class-action status in July and will decide if the $550m that the city of Anaheim provided to build Disneyland’s Mickey and Friends garage, with $108m going to constructing the garage and the rest going to Anaheim Convention Centre and Disney, can be considered a city subsidy.

At the centre of the matter is whether Disney is taking a subsidy because of the city’s complicated scheme by which Anaheim is paying back municipal bonds that it took out to pay for the garage that opened in 2000. The bonds are mostly being paid back via taxes paid by Disney and hotel room taxes picked up by the city.

The lawyer who filed the class-action lawsuit, Randy Renick, thinks that the repayment scheme is a subsidy since the garage was financed by the city but Disney is keeping the profits.

“I think the issues here are simple: The voters demanded that companies like Disney, who take public handouts, pay their workers a living wage,” Mr Renick told The Los Angeles Times. “Disney should not get a pass.”

But both Disneyland and the city of Anaheim deny that the company is getting a subsidy. The garage sits on land owned by Disney but was constructed by the city, which also still owns the garage.

The city sees it as an investment, not a subsidy.

Anaheim spokesman Mike Lyster told SFGATE: “We have a shared interest. They have an interest in running successful theme parks, shopping, dining and hotels, and we have interest in seeing a thriving economy that is based on visitors.”

“Building a parking structure facilitates more people coming to the parks and spending money in our city, which in turn generates revenue that we use to fund public safety, libraries and community centres,” he added.

“Disney operating it just makes sense for us,” Mr Lyster said. “We would have to have insurance and do regular upkeep on it. There are costs that come with operating a parking structure. So it’s actually in our interest to have them operate it because they bear those costs.”

“We believe that [we] will prevail and Disney will have to pay the proper wage,” Mr Bell said. “Right now, it’s supposed to be $17 an hour, and in 2022, it’ll be $18. That is not going to make our members rich, that will just make it so that maybe now they can afford to pay their rent, or they can put food on the table.”

The Independent has reached out to Disneyland for comment.