He keeps the elves in gingerbread bunkhouses - on the North Pole, that's not sufficient, no matter how much hot chocolate you drink.
If anyone has seen the expose, "Rudolph the Red-Nosed Reindeer", you'll find that the workers are regularly denied dental care (even when the practitioner s willing to provide free care) - pretty nasty when the workers are paid with cocolate coins and candycanes. And that's not even considering what he does with the reindeer. (A little magic dust, and the reindeer are flying, and doing his bidding)
Meanwhile, he keeps an elaborate and cozily warm cottage for himself, where he grows fatter every year.