Appellate Court Rules Disney Must Pay Living Wage Due to City Subsidy

In a groundbreaking decision, an appellate court has ruled that Disney is obligated to pay its employees a living wage, as mandated by a Living Wage Ordinance (LWO). The employees alleged that their employers failed to pay them a living wage since January 1, 2019, in violation of the LWO, which applies to hospitality employers in the Anaheim or Disneyland Resort areas benefiting from a city subsidy.

Definition of a City Subsidy

Under the LWO (Living Wage Ordinance), a city subsidy is defined as an agreement with the city that grants a person, other than the city itself, the right to receive a rebate of various taxes, including transient occupancy tax, sales tax, entertainment tax, property tax, or other taxes, presently or in the future, matured or unmatured. This definition sets the criteria for determining whether a company qualifies as benefiting from a city subsidy.

Allegations made by employees

The employees not only alleged non-payment of a living wage but also claimed violations of waiting time penalties, overtime wage laws, unfair business practices, and civil penalties under the Private Attorneys General Act (PAGA). These allegations added weight to their claim against their employers and further emphasized the need to examine whether the LWO applied to Disney.

Disney’s defense

Disney argued that it did not benefit from a city subsidy and, therefore, was not obligated to pay a living wage. However, the trial court rejected Disney’s defense, setting the stage for the appellate court to review the case and provide a final ruling.

Appellate Court’s decision

The appellate court carefully examined Disney’s agreements with the City of Anaheim, specifically relating to infrastructure improvements and bond obligations tied to tax revenues. Under the finance agreement, Disney would receive repayment based on anticipated incremental increases in the city’s transient occupancy taxes, sales taxes, and property taxes. This arrangement meant that Disney was entitled to receive a rebate or return of a portion of these taxes in the years when the city’s incremental tax revenues rebounded and could meet its bond obligations.

Ultimately, the appellate court concluded that Disney did, in fact, receive a city subsidy as defined by the LWO. This conclusion meant that Disney was obligated to pay its employees the required minimum wages as stipulated in the ordinance.

The obligation to pay a living wage

Further analysis indicates that Disney’s entitlement to receive a rebate or return of a portion of the incremental transient occupancy tax, sales tax, and property tax during certain years qualified as a city subsidy. Consequently, the appellate court firmly established that Disney was obligated to pay its employees a living wage due to the city subsidy it received.

This landmark decision highlights the crucial role that living wage ordinances play in protecting worker rights and ensuring fair compensation for employees. By broadening the definition of a city subsidy to include arrangements like the one Disney had with the City of Anaheim, the court has set a precedent that could have implications for other employers in the Anaheim or Disneyland Resort areas.

The appellate court’s ruling in favor of the employees serves as a significant victory for workers’ rights. Disney’s obligation to pay its employees a living wage, as mandated by the LWO, reaffirms the importance of fair compensation and recognizes the value and contributions of workers in the hospitality industry.

This decision also reiterates the need for companies to carefully evaluate their relationships with local governments when determining their obligations to pay a living wage. The case sets an example for other jurisdictions and employers to uphold living wage ordinances and prioritize the well-being of their workforce.

Overall, this decision marks a significant step towards a more equitable and just workplace, where employees are fairly compensated and their rights are protected. It serves as a powerful reminder that adherence to labor laws and ordinances is crucial for maintaining a thriving and inclusive economy.

Explore more

A Unified Framework for SRE, DevSecOps, and Compliance

The relentless demand for continuous innovation forces modern SaaS companies into a high-stakes balancing act, where a single misconfigured container or a vulnerable dependency can instantly transform a competitive advantage into a catastrophic system failure or a public breach of trust. This reality underscores a critical shift in software development: the old model of treating speed, security, and stability as

AI Security Requires a New Authorization Model

Today we’re joined by Dominic Jainy, an IT professional whose work at the intersection of artificial intelligence and blockchain is shedding new light on one of the most pressing challenges in modern software development: security. As enterprises rush to adopt AI, Dominic has been a leading voice in navigating the complex authorization and access control issues that arise when autonomous

Canadian Employers Face New Payroll Tax Challenges

The quiet hum of the payroll department, once a symbol of predictable administrative routine, has transformed into the strategic command center for navigating an increasingly turbulent regulatory landscape across Canada. Far from a simple function of processing paychecks, modern payroll management now demands a level of vigilance and strategic foresight previously reserved for the boardroom. For employers, the stakes have

How to Perform a Factory Reset on Windows 11

Every digital workstation eventually reaches a crossroads in its lifecycle, where persistent errors or a change in ownership demands a return to its pristine, original state. This process, known as a factory reset, serves as a definitive solution for restoring a Windows 11 personal computer to its initial configuration. It systematically removes all user-installed applications, personal data, and custom settings,

What Will Power the New Samsung Galaxy S26?

As the smartphone industry prepares for its next major evolution, the heart of the conversation inevitably turns to the silicon engine that will drive the next generation of mobile experiences. With Samsung’s Galaxy Unpacked event set for the fourth week of February in San Francisco, the spotlight is intensely focused on the forthcoming Galaxy S26 series and the chipset that