The United States Department of Labor reports, on Tuesday, that a central Pennsylvania McDonalds’ franchise has agreed to pay $211,000 in back pay and wages. The violations include actions that affected about 291 employees.
The Labor Department statement on Tuesday says that Cheung Enterprises, LLC and President Andrew Cheung of Middletown took advantage of 178 foreign student workers and other employees by making improper deductions from paychecks or failing to pay overtime. Investigators also say the company charged the student workers excessive rent for substandard housing and deducted that from their paychecks.
This isn’t the first time McDonalds’ has been targeted by the U.S Department of Labor. In December of 2012, in Denver, Colorado, a franchise was fined $58,227 in back wages to 1,258 employees. The investigation found minimum wage and record keeping violations at 16 different stores. The U.S Department of Labor found that the franchisee, Boselli Investments, LLC, made illegal deductions for uniforms and did not pay employees for all the hours worked by employees which resulted in employees making less than the federal minimum wage. Investigators also found that this franchise allowed 16 year olds to operate vehicles such as power –driven trash compactors which is illegal.
Then in July of 2013, a former McDonald's worker in Pennsylvania sued a franchise owner saying she was required to receive their wages through a debit card that charged fees, resulting in some hourly employees receiving less than minimum wage.
Natalie Gunshannon, a single mother, 27, said she and other workers were paid through a JPMorgan Chase Payroll Car, which has a $1.50 fee for ATM withdrawals, a $10 inactivity fee after 90 days, and a 75 cent online payment fee per transaction and other fees. In New York, workers at another franchise have also filed suit for the same reasons and believe the case has merit due to the deductions that the card mandated created a lower wage that is not at the federal level. Although the U.S Department of Labor allows payroll to be paid on a pre-paid card they are looking the merit of these lawsuits as the fees, typically, $40.00 a month reduce the pay rate the employee is paid at.
In yet another case from October, 2012, U.S. Immigration and Customs Enforcement, arranged a plea agreement between McDonald's restaurants in Wichita and ICE. The plea came after an investigation that McDonalds’ hired illegal immigrants. McCalla Corporation, a McDonald's restaurant franchisee with offices in Wichita, was charged Oct. 31 with one felony count of knowingly accepting a fraudulent
Identification document offered as proof that an employee was eligible to work. As part of the plea agreement, the corporation agreed to pay a $300,000 fine, and an additional $100,000 forfeiture judgment.
According to the McDonalds’ website (www.mcdonalds.com),” more than 80% of our restaurants worldwide are owned and operated by our Franchisees.” Problems do arise with franchises and McDonalds’s has stated on their web site that” McDonald’s and our owner-operators are committed to providing our employees with opportunities to succeed. We offer employees advancement opportunities, competitive pay and benefits. And we invest in training and professional development that helps them learn practical and transferable business skills.”