McDonald's Sued for Labor and Employment Violations

03/13/2014 | Business Litigation

Multiple lawsuits were filed against McDonald’s and its franchises this week.  The suits allege McDonald’s violated the federal minimum wage of $7.25 as set by the Fair Labor Standards Act. The lawsuits allege McDonald’s employment practices effectively reduce the wages paid below the federally mandated minimum. 

Two suits filed in Michigan allege McDonald’s required employees to pay for their own uniforms, the cost of which illegally reduced their wages below the $7.25 minimum.  The costs of employees’ uniforms were deducted from their paychecks.  The New York lawsuits allege McDonald’s required employees to clean their uniforms on their own time and at their own expense.  In addition, three lawsuits filed in California allege McDonald’s did not pay employees for all the hours worked, deleted hours from pay records, and denied breaks. 

In response to many of the lawsuits McDonald’s claims it is not responsible for its franchises.  It states it does not jointly employ the Plaintiffs and the franchises are independently owned and operated.   However, one California lawsuit is filed against the approximately 100 McDonald’s in the state that are company owned and operated.  The lawyers handling that lawsuit hope to make it a class action on behalf of 27,000 current and former employees. 

While McDonald’s may not own or operate many of the franchised restaurants, the company provided the franchises with the software to determine staffing.  The software calculated employees-to-sales ratios and determines when staffing needs to be reduced based on sales.   As a result, employees would be asked to clock out but remain in the restaurant and ready to punch back in when customers increased.  Conversely, when sales were booming but they were understaffed, employees were denied breaks as required by federal law. 

In addition to mandating a minimum wage, the Fair Labor Standards Act mandates breaks and meal periods as well as the time length and compensation for those periods.  In 2009 the FLSA raised the minimum wage to $7.25 from $6.55; it has not been raised since.   Raising the minimum wage remains the topic of political debate, with President Obama recently advocating for $10.10 per hour. 

Since the lawsuits were filed just this week it will be some time before the litigation resolves.  It is unknown whether the employees bringing suit remain employed by McDonald’s.