McDonalds and KFC suspected of labor rights violations

Receiving just half the minimum hourly wage, an unpaid 15 minute rest every 4 hours, working without an employment contract even after a year ... evidence of these practices has been found in McDonalds and KFC restaurants in Guangzhou, suggesting that some of these famous fast-food chain restaurants are violating China's labor laws. On the afternoon of March 29, the Guangzhou municipal labor and social security surveillance detachment issued a formal inquiry notice to the two American fast-food giants after investigation.

Surveillance department: strict punishments will be handed done once violations are verified

Half the minimum hourly wage! Restaurants: you are free to go

Since late January, Gao Xiaoshi has worked in the McDonalds restaurant at Tianhe Book Store Center part-time. She is paid 4 yuan an hour (about 50 US cents) plus 1.3 yuan as a meal allowance. Every day Gao has to work for 6 or 7 hours, sometimes for as many as 10 hours. She is only permitted a 15 minute rest (in which she must eat her meals) every 4 hours. This break is not paid.

Gao's classmate, Hu Shuyan, works in a KFC restaurant in Saibo, Guangzhou city. Her hourly wage is almost the same as Gao's. The toughest thing for her though is that she is forced to work without rest, even if there are no customers in the restaurant. On January 1st, the Guangzhou city government released a rule stipulating that part-time workers be paid no less than 7.5 yuan per hour. Gao and Hu have the same question: why do we have to work so hard for just half the minimum wage?

A Ling is a student at the Guangdong Technical Teachers College. She has been working at McDonalds for nearly a year. A Ling and her colleagues asked for a raise in accordance with the law. The restaurant told them, "You are free to go if you think your wage is too low!"

These are not isolated cases. Reporters doing a survey discovered that nearly 200,000 employees of KFC, McDonalds and Pizza Hut in China are underpaid. A large number of these workers are part-time employees who are also studying at college and technical schools. It has been calculated that these American fast-food enterprises have embezzled 1.7-3.5 yuan per hour from each part-time worker. Moreover, these part-time employees, who are paid so poorly, generally work extremely hard without any work injury insurance. According to the "Opinion of the Ministry of Labor and Social Security on Several Issues Relating to Part-time Employment", released in 2003, "part-time employees do not need to get through a probationary period." However, McDonalds and some other foreign fast-food enterprises generally put their employees on one month probation. Moreover, most of them refuse to provide a copy of the agreement to their employees.

Are these restaurants struggling to pay the minimum wages because they are not turning a big enough profit? Hu Shuyan said that the restaurant she works for turns a very good profit. Its daily turnover exceeds 50,000 yuan. Gao Xiaoshi has seen her restaurant's daily business report and is aware that expenditure on wages accounts for just 3 percent of the daily turnover.

Is part-time employment regulated by the labor law?

Expert: All forms of enterprise employment are regulated

In response to questions from the public, McDonalds made an announcement stating that "is committed to relevant laws and regulations in China and part-time wages are paid according to regulations."

When the issue was first raised, Yum! Restaurants China (which runs Pizza Hut and KFC) claimed that it hired only full-time workers, and that it pays their wages according to the minimum wage stipulated by local governments. However, legal professionals have asked why, when these companies have signed contracts with college students, they have failed to provide medical insurance, endowment insurance, unemployment insurance or a housing allowance, which is a serious violation of the labor laws. Yum! Restaurants China immediately issued a statement saying that all its employees are paid in line with state standards. The media had confused KFC's employment standards in Guangdong Province with the part-time employment regulations that came into effect in Guangdong Province on January 1, 2007, causing unnecessary misunderstanding.

When asked this misunderstanding, Cui Minghuan, the manager of KFC Guangdong, said that part-time employees of KFC are neither full-time workers nor non full-time workers, therefore the current rules about the minimum hourly wage for non full-time workers in the province is not applicable. Moreover, because students do not have legal qualifications as subject of labor-law relationships, they are not protected by the labor laws.

A senior lawyer at Guangzhou Datong Law Firm, Zhu Yongping, disputed KFC's argument. According to Zhu, as long as the Chinese citizen is "an adult with the capacity to work who has worked and received payment from an enterprise", that citizen has entered into a labor contract with the employer. From this point on, both employer and employee must abide by the labor laws.

Wang Xuyang, a lawyer at Guangdong E-time Law Firm said that according to the relevant laws and regulations, "there are just two modes of employment: full-time and part-time. If KFC workers are neither full-time nor part-time, what kind of employees are they? If the labor law does not bind KFC, is there any law or regulation that does?"

The leader of the Guangzhou Municipal Labor and Social Security Surveillance Detachment, Liao Xiangda, stated firmly that the labor law covers all hiring practices in all enterprises in the country. Punishment will be handed down if violations are discovered. However, authorities need to further tighten labor laws to protect the legal rights of students working part-time.

Labor surveillance departments will fully examine the minimum wage situation, employment procedures and social security

Experts say that by paying just 4 yuan an hour, McDonalds and some other foreign fast-food enterprises have violated the minimum hourly wage standard for part-time workers. Moreover, the meal allowance cannot be calculated as part of an hourly wage. If employees work for more than five hours a day, they are no longer part-time workers. Their employers must sign full-time contracts with them. Students cannot work full time. Full-time workers should not be paid hourly.

The report on the violation of labor rights by American fast-food restaurants has captured the attention of local authorities. Zhang Fengqi, deputy director of Guangdong Provincial Labor and Social Security Department, said that relevant administrative departments will thoroughly investigate this issue. The chief of the Guangzhou Municipal Labor and Social Security Surveillance Office has asked the related detachment to investigate all three fast-food giants in Guangzhou.

On March 29, the Guangzhou Municipal Labor and Social Security Surveillance detachment issued an inquiry notice to Yum! Restaurants China and Guangzhou Sanyuan McDonald Food Co. Ltd., asking them to provide information and assist administrative departments in investigating the wage situation, employment procedures and social security in their enterprises. "If they discover any violations, officials will order them to compensate employees and impose appropriate penalties."

Statistics:

The world's largest fast-food chain, McDonalds, currently has more than 790 restaurants in China and employs more than 50,000 Chinese.

Yum! Restaurants China runs KFC and Pizza Hut. Currently it has over 1,600 KFCs and more than 200 Pizza Huts, and employs more than 120,000 people.

According to regulations, the minimum hourly wages across Guangdong province for a part-time worker are: 7.5 yuan an hour (in Guangzhou); 6.6 yuan an hour (in Zhuhai, Foshan, Dongguan and Zhongshan) and 5.8 yuan an hour (in Shantou, Huizhou and Jiangmen). The minimum endowment insurance and basic medical insurance fee that should be paid by both employers and employees is included.

By People's Daily Online