Alleging systematic wage theft by both McDonald’s corporate and its franchisees, workers filed seven class-action lawsuits this week seeking unspecified damages from the fast food giant.
Workers filed two suits in Michigan, one in New York, and four in California. All seven name the McDonald’s corporation itself, which is unusual, and five of the seven also name franchisees who own and operate licensed McDonald’s locations. About 90 percent of all McDonald’s locations in the United States are controlled by franchisees, which has provided the corporation with a screen against criticisms of how its restaurants operate.
The justification for targeting McDonald’s corporate is based on a computer system the company installs in its stores to monitor labor costs. “Managers at McDonald’s look at something they call the ‘labor number’ on the computer throughout the day,” said Jason Hughes, who has worked at a McDonald’s location in Fremont, CA, for the past two years. “The labor number is how much the store spends on workers versus how much money the store brings in, and I often hear managers worry that ‘labor is too high,’” Hughes said on a call with reporters Thursday afternoon.
“I knew I wouldn’t be making a lot of money,” said Hughes, “but I thought that a well-known company like McDonald’s would treat me fairly, or at least follow the law. We brought this lawsuit because neither of those things happened.”
The use of the “labor number” monitoring computers is crucial to these class-action suits’ effort to hold the corporate center of McDonald’s accountable for wage law violations at its stores. According to attorneys who explained the suits to reporters, those computer systems are installed in franchise and corporate-owned McDonald’s locations alike, and they are systematically used to keep workers in unpaid limbo, which violates federal wage and hour laws. “When that labor cost reaches a certain percentage,” Michigan attorney Ed James said, “the franchisees take people off the clock to get it down below that number, then get people to clock back in.” There are about 1,500 workers in Michigan who will be eligible to join the two suits there should it be granted class-action status, according to James.
The case in New York illustrates the other common form of wage theft alleged in these filings, where stores require workers to pay for their uniforms and to launder them. Those expenses drive McDonald’s employees below minimum wage in many states, and in New York they also violate a specific state regulation requiring companies to reimburse workers weekly for the cost of buying and maintaining uniforms, according to attorney Jim Reef.
Wage theft is rampant in low-wage occupations, and laws against it are difficult to enforce. In California, even workers who successfully prove they were not paid for hours worked and win a judgment in their favor hardly ever see any back pay, because companies simply close down and rebrand rather than pay what they owe.
Fast food workers are among the most vulnerable members of the American workforce and are typically paid so little that they rely on public assistance programs despite holding full-time jobs. McDonald’s drew fire last year over a website it operated for employees that included a sample budget without any allowance for heating costs and just $20 per month set aside for health insurance. The fast food industry has become a flashpoint for the nationwide campaign to raise the minimum wage. But the allegations in the lawsuits filed this week paint a picture of a company that systematically disobeys the minimum wage laws already in effect around the country.