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McDonald's Pays $26 Million To Settle Wage Theft Suit

Published Tuesday, November 26, 2019
by Danielle Wiener-Bronner/CNN Business
McDonald's Pays $26 Million To Settle Wage Theft Suit

(NEW YORK CITY) - McDonald's is paying $26 million to settle a Class Action Lawsuit over Wage Theft - the latest development in a string of conflicts between the major restaurant chain and its Employees.

The settlement puts an end to a multi-year legal battle between the company and California Workers who alleged that McDonald's was skirting Overtime Payment Laws and denying Employees timely breaks, among other things.

About 38,000 people are represented in the suit, according to a court filing obtained by CNN from the Fight for $15, which advocates for Workers' Rights.

In 2013, Maria Sanchez and others filed a suit against corporate-owned McDonald's restaurants in the state, saying that as far back as 2009 McDonald's failed to pay overtime to Employees who worked more than eight hours during a 24-hour period.

McDonald's actions violated state law, the suit claimed.

"While we continue to believe our employment practices comply with the California Labor Code, we have decided to resolve this lawsuit," McDonald's responded in a statement.

The vast majority of McDonald's locations are owned and operated by franchisees.  Those locations are encouraged to follow the same rules and procedures as corporate-owned locations, but are not required to do so.

In addition to paying out the $26 million, McDonald's will periodically train Employees at corporate-owned California restaurants on their rights, like receiving 10-minute breaks roughly every two hours and getting new uniforms, at no cost, to replace ones that have been worn out or damaged on the job.

McDonald's has been accused of underpaying by other Workers, as well.

In 2014, Employees in Michigan and New York filed Class Action Suits over Wage Theft.  At the time, the company said it was "committed to undertaking a comprehensive investigation of the allegations and will take any necessary actions."

In 2016, the company agreed to pay $3.75 Million to settle a separate Wage Theft Class Action Suit in California, where Workers in franchise locations made similar accusations.

Just last week, McDonald's agreed to pay what could be tens of millions of dollars to New Zealand Employees for miscalculating Holiday Wages.

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