After nearly seven years of litigation, US fast-food chain operator McDonald's Corp has finally agreed to pay a $26 million settlement to end the case against it. The lawsuit in question had accused the company of intentionally underpaying its employees in t,he United States, specifically those that were working at its corporate-owned branches located in California.
The lawsuit against McDonald's also alleges that the company intentionally used a convoluted timekeeping system that apparently cheated employees out of their overtime pay. The timekeeping system also restricted employees from taking breaks during their shifts. The suit also alleges that corporate-owned branches forced workers to pay for the cleaning of their uniforms.
McDonald's payment of the preliminary settlement effectively resolves the suit's claims, which were filed by around 38,000 employees of the company's branches in California. The $26 million settlement is the largest amount paid by the company in a wage-related case in the United States.
Apart from the hefty fine, the settlement also included an accord that forced McDonald's to agree to certain changes in the human resource operations of its branches, pending court approval.
The accord included a requirement for the company to pay for required overtime. McDonald's will also be required under the accord to implement an electronic pay tracking system and to provide its employees rest breaks during their shifts rather thathe n at the end or start of shifts. The fast-food retailer will also need to provide replacement uniforms to employees after their old uniforms become worn out or are damaged.
Despite agreeing to pay the settlement amount, McDonald's has continued to deny any wrongdoing. In a statement issued by the company following the settlement, McDonald's stands by its claim that its treatment of its employees all complied with California's labor laws. McDonald's also clarified that it is continually making changes to the operations of its restaurants to "promote continued compliance" of existing labor laws.
The recently settled case is just one out of dozens of other lawsuits targeting McDonald's labor practices, including its alleged underpaying of employees and unsafe working conditions in its franchised and company-owned branches. McDonald's currently has around 14,000 branches in the US, 95 percent of which are franchised.
Earlier in the month, the American Civil Liberties Union and workers in Michigan filed a lawsuit against the company for allegedly allowing sexual harassment in the workplace. Last week, the company was sued by Chicago-area workers who complained about a restaurant redesign that allegedly placed them in danger of physical attacks by customers.
