Industry News | March 30, 2007

McDonald's and Yum! Wages Examined

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According to The Associated Press, Yum! Brands and McDonald’s are being investigated by Chinese labor officials for underpaying employees in their Guangdong locations. Both companies are being accused of not paying employees the required $.97 an hour minimum wage at McDonald’s, KFC, and Pizza Hut restaurants in the southern province.

The claims first came to light after the regional newspaper, New Express Daily, featured an investigative story where reporters applied for jobs at the fast-food restaurants and wrote about their wage offerings. In some instances employers offered up to 40 percent less than minimum wage.

The New Express Daily reported that Pizza Hut paid part-timers 5 yuan ($.65), the best wages of the three, while KFC offered 4.7 yuan ($.61). McDonald’s, the lowest of the group, paid part-time employees 4 yuan ($.52), according to the AP.

Both companies have since claimed to have followed the law but have requested clarification on regulations pertaining to part-time employees, mainly students. The News Express Daily reported students make up about 70 percent of part-time workers in the area’s fast-food industry.

In a statement issued by McDonald’s, the company said it is working with local labor officials to clarify its crew and employment systems.

“We commit ourselves to providing employees with equal work opportunity, aspiring and safe working environment, and full range of career development,” the statement said.

Yum! Brands’ statement said that the wage violations resulted from confusion over whether the part-time minimum wage applied to students.

“This was caused by a newly introduced regulation. We are working with the government to seek clarification of these laws,” it said. “Yum has always strictly adhered to Chinese laws and regulations.”

The Guangdong labor official interviewed by the AP said a new minimum wage was enacted January 1, 2007 to be applied to part- and full-time workers.