McDonald’s Workers in Three States File Suits Claiming Underpayment

[ksen]

McDonald’s Workers in Three States File Suits Claiming Underpayment

McDonald’s workers in California, Michigan and New York filed lawsuits this week against the company and several franchise owners, alleging that they illegally underpaid employees by erasing hours from their timecards, not paying overtime and ordering them to work off the clock.

It's bad enough fast food restaurants pay their employees so little, but stealing their wages too?

If this is true I hope McDonald's gets nailed.

And adding insult to injury:

Several McDonald’s workers also filed suit in federal court in New York, contending that they were not reimbursed for the time and cost of cleaning their uniforms. The plaintiffs maintain that the added expenses reduced the pay of several workers below the federal and state minimum wage.

“Because McDonald’s restaurants pay so little, forcing workers to clean their Golden Arches uniforms on their own dime drives many workers’ wages below the legal minimum,” said Jim Reif, a lawyer who filed the New York lawsuits.

McDonald's a good corporate citizen.

 

[Underseer]

Well, it's a franchise, so I imagine that at any given time there are franchisees doing awful things like this. What would be more telling is if they can prove McDonald's corporation was involved.

 

[T.G.G. Moogly]

Why not sue the franchise then? Is that not possible?

 

[Loren Pechtel]

Well, it's a franchise, so I imagine that at any given time there are franchisees doing awful things like this. What would be more telling is if they can prove McDonald's corporation was involved.

Yeah. The reality is that failing businesses are prone to dirty deeds. Just because it's McDonald's doesn't mean a franchisee isn't in trouble. There's no reason to blame corporate other than deep pockets.

And unless their uniforms require something out of the ordinary in cleaning how is laundering them any more work than laundering whatever you would have worn if there was no uniform requirement?

- - - Updated - - -

Why not sue the franchise then? Is that not possible?

Such dirty deeds usually mean a business in trouble. Suing them would likely produce little.

 

[arkirk]

Yeah. The reality is that failing businesses are prone to dirty deeds. Just because it's McDonald's doesn't mean a franchisee isn't in trouble. There's no reason to blame corporate other than deep pockets.

And unless their uniforms require something out of the ordinary in cleaning how is laundering them any more work than laundering whatever you would have worn if there was no uniform requirement?

- - - Updated - - -



Such dirty deeds usually mean a business in trouble. Suing them would likely produce little.

When a practice extends to numerous "franchises" you can bet the parent company's guidance is at work. Have you ever noticed all McDonalds look alike? That is no accident.

 

[Underseer]

Yeah. The reality is that failing businesses are prone to dirty deeds. Just because it's McDonald's doesn't mean a franchisee isn't in trouble. There's no reason to blame corporate other than deep pockets.

And unless their uniforms require something out of the ordinary in cleaning how is laundering them any more work than laundering whatever you would have worn if there was no uniform requirement?[...]

It wouldn't be a big deal if they weren't being paid poverty wages. Maybe things were different back when you worked for fast food restaurants, but the economics of things are a lot different today; their wages have not kept up with the cost of living by a very wide margin.

I with the "magic of the free market" worked the way you claim it does. If it did, none of them would need any of my tax dollars in the form of food stamps and other government programs just to pad McDonald's bottom line. If McDonald's actually paid them enough to live on (as one would expect them to do entirely on their own based on your economic theories), then no one would give a crap about who has to pay for laundering those clothes.

 

[Loren Pechtel]

It wouldn't be a big deal if they weren't being paid poverty wages. Maybe things were different back when you worked for fast food restaurants, but the economics of things are a lot different today; their wages have not kept up with the cost of living by a very wide margin.

I with the "magic of the free market" worked the way you claim it does. If it did, none of them would need any of my tax dollars in the form of food stamps and other government programs just to pad McDonald's bottom line. If McDonald's actually paid them enough to live on (as one would expect them to do entirely on their own based on your economic theories), then no one would give a crap about who has to pay for laundering those clothes.

The market doesn't guarantee wages sufficient to live on.

 

[Axulus]

It wouldn't be a big deal if they weren't being paid poverty wages. Maybe things were different back when you worked for fast food restaurants, but the economics of things are a lot different today; their wages have not kept up with the cost of living by a very wide margin.

I with the "magic of the free market" worked the way you claim it does. If it did, none of them would need any of my tax dollars in the form of food stamps and other government programs just to pad McDonald's bottom line. If McDonald's actually paid them enough to live on (as one would expect them to do entirely on their own based on your economic theories), then no one would give a crap about who has to pay for laundering those clothes.

Market wages are the highest wages that anyone in society is willing to pay for the particular labor one is able to supply. There is no guarantee this will be enough to survive on. The labor offered may be of such little value that no one in the world is willing to pay enough for the person to survive on the wage alone.

 

[Bomb#20]

Market wages are the highest wages that anyone in society is willing to pay for the particular labor one is able to supply. There is no guarantee this will be enough to survive on. The labor offered may be of such little value that no one in the world is willing to pay enough for the person to survive on the wage alone.

Silly person! The value of labor isn't how much people value it; it's how much people value it plus however much of the workers' qi they're allowed to steal! Pay attention!

 

[laughing dog]

Market wages are the highest wages that anyone in society is willing to pay for the particular labor one is able to supply. There is no guarantee this will be enough to survive on. The labor offered may be of such little value that no one in the world is willing to pay enough for the person to survive on the wage alone.

And your position misses the point, because the argument is really about the "insufficiency" of market wages in this case.

 

[Axulus]

And your position misses the point, because the argument is really about the "insufficiency" of market wages in this case.

The claim being made was that the "magic" of the free market would bring about enough wages for anyone to live on who is able to find work. No one makes such a silly claim except Underseer in a poor strawman attempt.

The reality of the situation is that fast food is a high volume low margin business on a product with lots of competition and plenty of substitutes (cooking at home being the main substitute), making the price elasticity on the product quite high. Not only that, but the product itself is loaded with sodium and fat and mostly empty calories. It's one of those sectors that adds very little value to society and requires very little skill and capital to produce (anyone can shift production to their home quite easily). Hence the low wages. It's one of those jobs that really should be a high school or college job, or a supplement to a full-time working spouse.

 

[rousseau]

Not that I don't want to see McDonald's employees being paid more, but in my city if I was to work full time at McDonalds I'd be pulling in 1400 dollars per month, which is much more than enough to live on. In fact, although I make much more than that per month these days, my expenses per month are under 1000 dollars, not including the tuition I pay. Now, can you have a superfluous lifestyle and easily raise a family on 2800 dollars per month? No. But I don't see why that's the universe's responsibility to you. As advanced as many economies have become, the idea that everyone should be well above the poverty line seems like a pipe-dream to me, and I don't see why having a roof over your head and three square meals a day should be construed as poverty.

Now, if you legitimately can't work enough minimum wage hours in a week to feed and house yourself, and your government isn't supplementing you enough, that's a failure of your society.

 

[Axulus]

Not that I don't want to see McDonald's employees being paid more, but in my city if I was to work full time at McDonalds I'd be pulling in 1400 dollars per month, which is much more than enough to live on. In fact, although I make much more than that per month these days, my expenses per month are under 1000 dollars, not including the tuition I pay. Now, can you have a superfluous lifestyle and easily raise a family on 2800 dollars per month? No. But I don't see why that's the universe's responsibility to you. As advanced as many economies have become, the idea that everyone should be well above the poverty line seems like a pipe-dream to me, and I don't see why having a roof over your head and three square meals a day should be construed as poverty.

Now, if you legitimately can't work enough minimum wage hours in a week to feed and house yourself, and your government isn't supplementing you enough, that's a failure of your society.

Is the 1600 before or after taxes?

In my state, they get paid $1,491 before taxes at the minimum, and about $1,300 after taxes. A working parent would also get about $350/month in earned income and child tax credits, and about $200 in food stamps. This can be supplemented with monthly food bank visits for about $75 worth of food per month.

This is survivable for a one parent one child household in most areas. Obviously things are going to be tough and the neighborhood won't be very good, but to call it unlivable is an exaggeration. Not to mention that steadily holding onto the job for a few years opens up more opportunities for something a little bit better paying and some raises.

 

[rousseau]

Is the 1600 before or after taxes?

In my state, they get paid $1,491 before taxes at the minimum, and about $1,300 after taxes. A working parent would also get about $350/month in earned income and child tax credits, and about $200 in food stamps. This can be supplemented with monthly food bank visits for about $75 worth of food per month.

This is survivable for a one parent one child household in most areas. Obviously things are going to be tough and the neighborhood won't be very good, but to call it unlivable is an exaggeration.

1400 is after taxes, although that was what I was making back in about 2008, so it's probably a bit higher now.

I think what most people miss when they interpret the last few decades is what life was like 3-400 years ago. In Early Modern Europe you were lucky if you didn't starve to death during your lifetime, but since we had a few decades in the twentieth century where many were wealthy and prosperous, everyone expects that to be a permanent condition. Sure, it sucks that some people have 12 houses and I'm eating rice and beans, but that's what life is.

 

[Axulus]

1400 is after taxes, although that was what I was making back in about 2008, so it's probably a bit higher now.

I think what most people miss when they interpret the last few decades is what life was like 3-400 years ago. In Early Modern Europe you were lucky if you didn't starve to death during your lifetime, but since we had a few decades in the twentieth century where many were wealthy and prosperous, everyone expects that to be a permanent condition. Sure, it sucks that some people have 12 houses and I'm eating rice and beans, but that's what life is.

And it's not really the case that wealth and prosperity have declined. What seems to be happening is that a significant percentage aren't improving compared to the prior generation. When you take into account some other factors: size of household and number of single parents, benefits (including health benefits), potential overstatement of inflation (a good argument can be made that it is overstated by .5-1%, based on quality improvements and purchase substitution, which matters from a quality of life standpoint), there have still been broad based increase (although the rate of increase is a lot slower than the 50's-70's). Then there are some other factors that aren't part of income that have improved: violent crime is down, property crime is down, air and water quality are up, government spending in real terms per capita is up substantially (some of that will flow in though better services and, if it doesn't then the money that is spent can be spent much better), and hours worked are down.

There is an expectation that each subsequent generation will live a much better life than the previous generation. This is not something that is automatic or guaranteed. It's incredible that the quality of life continues its steady improvement especially in relation to what 90% of humanity had to live though 300-400 years ago. What we've been able to achieve is incredible and all signs point to further improvements (doesn't look like we are going to hit the wall just yet).

I think one important thing to consider for you and others in your situation: is there a feasible path that you could take, if you so choose, to increase your material standard of living in, say, 5 years from now? Are there a series of steps you could take if you make the commitment (whether it be obtaining a degree or certification of some sort, or focusing on a different career, etc.), or are all options shut off for one reason or another? Or is it a situation that you are fine where you are at and choose instead to keep doing what you are doing, and find your material standard of living sufficient/manageable and would rather continue with that than to make the commitment and actions necessary to substantially improve it (which is a big time commitment that may land you in a career with more stress and working hours).

 

[rousseau]

And it's not really the case that wealth and prosperity have declined. What seems to be happening is that a significant percentage aren't improving compared to the prior generation. When you take into account some other factors: size of household and number of single parents, benefits (including health benefits), potential overstatement of inflation (a good argument can be made that it is overstated by .5-1%, based on quality improvements and purchase substitution, which matters from a quality of life standpoint), there have still been broad based increase (although the rate of increase is a lot slower than the 50's-70's). Then there are some other factors that aren't part of income that have improved: violent crime is down, property crime is down, air and water quality are up, government spending in real terms per capita is up substantially (some of that will flow in though better services and, if it doesn't then the money that is spent can be spent much better), and hours worked are down.

There is an expectation that each subsequent generation will live a much better life than the previous generation. This is not something that is automatic or guaranteed. It's incredible that the quality of life continues its steady improvement especially in relation to what 90% of humanity had to live though 300-400 years ago. What we've been able to achieve is incredible and all signs point to further improvements (doesn't look like we are going to hit the wall just yet).

I think one important thing to consider for you and others in your situation: is there a feasible path that you could take, if you so choose, to increase your material standard of living in, say, 5 years from now? Are there a series of steps you could take if you make the commitment (whether it be obtaining a degree or certification of some sort, or focusing on a different career, etc.), or are all options shut off for one reason or another? Or is it a situation that you are fine where you are at and choose instead to keep doing what you are doing, and find your material standard of living sufficient/manageable and would rather continue with that than to make the commitment and actions necessary to substantially improve it (which is a big time commitment that may land you in a career with more stress and working hours).

Well, personally, when I was working a minimum wage job it was right out of university and the only thing that was both temporary and available. Eventually I went back to school for a more marketable program, so I expect that in the next decade my salary will increase by a pretty large margin.

- - - Updated - - -

I think what a lot of people are lacking is either genuine ability or money.

 

[laughing dog]

The claim being made was that the "magic" of the free market would bring about enough wages for anyone to live on who is able to find work. No one makes such a silly claim except Underseer in a poor strawman attempt.

No one? You don't pay attention to these boards very much.

The reality of the situation is that fast food is a high volume low margin business on a product with lots of competition and plenty of substitutes (cooking at home being the main substitute), making the price elasticity on the product quite high. Not only that, but the product itself is loaded with sodium and fat and mostly empty calories. It's one of those sectors that adds very little value to society and requires very little skill and capital to produce (anyone can shift production to their home quite easily).

If it adds so little value why is McDonald's net profit margin so much higher than the industry average (http://www.stock-analysis-on.net/NYSE/Company/McDonalds-Corp/Ratios/Profitability#Net-Profit-Margin)? It's profit margin is higher than many firms outside of the industry as well.

Hence the low wages. It's one of those jobs that really should be a high school or college job, or a supplement to a full-time working spouse.

What should be and what is are too different concepts.

 

[Axulus]

No one? You don't pay attention to these boards very much.
If it adds so little value why is McDonald's net profit margin so much higher than the industry average (http://www.stock-analysis-on.net/NYSE/Company/McDonalds-Corp/Ratios/Profitability#Net-Profit-Margin)? It's profit margin is higher than many firms outside of the industry as well.
What should be and what is are too different concepts.

McDonald's the corporation is primarily a franchising corporation whose biggest economic asset is its IP. It has very different margins and economics compared to a fast food restaurant itself, agreed?

 

[laughing dog]

McDonald's the corporation is primarily a franchising corporation whose biggest economic asset is its IP. It has very different margins and economics compared to a fast food restaurant itself, agreed?

I presented my data. Do you have any data to buttress your claim about McDonald's franchises?

 

[Loren Pechtel]

Now, if you legitimately can't work enough minimum wage hours in a week to feed and house yourself, and your government isn't supplementing you enough, that's a failure of your society.

The problem with working enough hours is that the rules about benefits mean employers tend to keep workers on part time status.