How Disney conspired with government officials to steal over $100 million from theme park workers

Mickey Mouse statue on Main Street, during the "100 Years of Wonder" celebration at Disneyland on March 13, 2023 in Anaheim, California. (Photo by AaronP/Bauer-Griffin/GC Images)

Working at the "Happiest Place on Earth" can be a nightmare.

A landmark 2018 report by researchers at Occidental College found that workers at Disneyland were paid such low wages that they struggled to make ends meet. According to the report, "hourly wage for Disneyland Resort workers in real dollars dropped 15% from 2000 to 2017, from $15.80 to $13.36." As a result, "three-quarters say that they do not earn enough money to cover basic expenses every month." More than half of Disneyland employees said they were worried about being evicted, and one out of 10 reported being homeless in the last two years.

Meanwhile, Disney CEO Bob Iger was paid $65.6 million in 2018, as much as "the total pay of 9,284 Disneyland workers."

In response, voters in Anaheim, California, approved the Living Wage Ordinance, known as Measure L. The ballot initiative was sponsored by unions representing Disneyland workers, and the text of the initiative cited the findings of the Occidental College report on the economic conditions of Disneyland employees.

Measure L established an initial minimum wage for affected employers of $15 per hour starting in 2019, increasing another $1 per hour annually through 2022. Beginning in 2023, the wage is adjusted annually for inflation. In 2025, the minimum wage under Measure L will be $20.42.

Measure L applies to hospitality employers in Anaheim that benefit from a "city subsidy." This clearly applied to Disneyland because, in 2015, the Anaheim City Council "approved a policy to reimburse Disney for any future admissions tax for up to 45 years." And in 2016, "Disney received a $267-million tax break for a planned luxury hotel."

As Measure L gained momentum, however, Disney asked the Anaheim City Council to tear up those agreements. The City Council complied. Then, the Anaheim City Attorney issued an opinion stating that Measure L — which was put into place by voters in response to substandard wages at Disneyland — did not apply to Disneyland. (Without Disneyland, Measure L would only benefit about 150 workers.)

So after voters approved Measure L, Disneyland did not increase its minimum wage.

In 2019, a group of Disneyland employees filed a class action lawsuit, arguing that Disneyland was violating the law. The employees argued that despite canceling two agreements, Disneyland still benefited from "city subsidies" and was required to comply with Measure L. Specifically, the employees cited the issuance of city bonds to help finance the construction of Disney California Adventure, a new amusement park, and a parking garage. Under the terms of the agreement, the bonds were repaid by city tax revenue. But if taxes were insufficient to cover the bond payments, Disney would make up the shortfall. Once tax revenues recovered, the City of Anaheim would reimburse Disney.

In November 2021, a state judge ruled in favor of Disney, arguing that Measure L did not apply. "Whether the city of Anaheim ‘subsidized’ the Disney Defendants in a colloquial sense is not an issue," the judge wrote, acknowledging that Disney received tax benefits from the city. But, the judge found that the bond issue did not meet the technical definition of a "city subsidy."

In July 2023, a California appeals court reversed the decision. It found that the nature of the bond agreement met the plain meaning of a "city subsidy." In October 2023, the California Supreme Court declined to consider the case, cementing a victory for Disneyland employees.

This week, Disney agreed to settle the class action lawsuit for $233 million, the largest settlement for wage theft in California history. The settlement includes over $100 million in back wages that Disney, with the help of the City of Anaheim, attempted to steal from Disneyland workers. The remainder of the settlement includes interest on the back pay, penalties, and legal fees.

The settlement — and the multi-year effort to secure it — illustrates the lengths that major corporations will go to avoid paying workers what they are owed. While it represents a victory for over 50,000 workers, wage theft impacts millions of workers. Unlike the workers at Disneyland, almost none of them will be made whole.

Biden and Trump administrations recover a small fraction of stolen wages

Wage theft can take many forms — from paying less than minimum wage to not paying for overtime to misclassifying employees as independent contractors. One 2017 study estimates that American workers lose a total of $15 billion per year to minimum wage violations alone. Another study from 2014 found that all types of wage theft cost workers $50 billion annually.

Yet only a fraction of these wages are ever recovered. A 2021 study from the Economic Policy Institute found that only $3.24 billion in stolen wages were recovered from 2017 to 2020 through Department of Labor investigations, state agencies, or class action lawsuits. Of the small portion of recovered stolen wages, an even tinier amount is recovered by the federal government through the Department of Labor.

From January 2021 to September 2024, the Biden administration recovered about $1 billion in stolen wages for US workers. The Trump administration recovered about the same amount — $1.2 billion in four years.

Sparse resources for wage theft investigations

Part of the reason American workers only recover a tiny fraction of their stolen wages is that filing a successful class-action lawsuit is difficult for employees without strong union backing. Most workers rely on state and federal government protection, but the agencies charged with investigating wage theft lack the resources necessary to track the tens of billions of dollars stolen each year.

Most state governments are under-equipped to investigate wage theft. Many states have just a handful of investigators. In 2018, seven states had no investigators responsible for tracking wage theft at all.

At the federal level, wage theft investigations are led by the Department of Labor’s Wage and Hour Division (WHD). WHD’s resources have dwindled significantly over the last 50 years. In 1978, the division had one inspector for every 69,000 workers, but by 2018, that ratio had shrunk to one investigator per 175,000 workers.

During the incoming Trump administration, it is possible that WHD will lose even more investigators. Project 2025, whose leaders and policies Trump renounced on the campaign trail but has since embraced, calls for budget cuts and hiring freezes in the Department of Labor. (Most of the cuts, however, are targeted outside of the WHD.)

Another policy Trump could enact that would enable companies to steal from their employees is reinstating the Payroll Audit Independent Determination (PAID) program. PAID, launched in 2018 and terminated immediately when Biden took office, allowed companies to avoid any fees or penalties for wage theft if they self-reported the theft and paid workers back.