$26M McDonald’s Settlement to Resolve Allegations of California Labor Laws Violations

With a $26 million settlement offer, McDonald’s has agreed to resolve allegations it broke California labor laws regarding overtime pay, meal breaks and more.

The class action lawsuit was filed almost seven years ago against corporate-run locations and covers nearly 38,000 workers. The Los Angeles County Superior Court judge still needs to approve the settlement.

McDonald’s Restaurants of California Inc. stood accused of wage theft by failing to pay minimum wage, pay overtime wages, provide meal breaks and provide rest breaks to its cooks and cashiers as required by law.

According to the New York Times, McDonald’s issued a statement, saying, “While we continue to believe our employment practices comply with the California Labor Code, we have decided to resolve this lawsuit filed back in early 2014. With this settlement, the parties have reached a mutually acceptable resolution and have submitted the settlement to the Court for its review and approval.”

Allegations of California Labor Laws Violations

One of the allegations involved the way overnight shifts were allotted and paid. If a worker started his shift on one day, but the shift ended the next day, all the hours allegedly were shown on the day the shift began in order to prevent overtime from being paid.

Employees alleged their meal and rest breaks were missed or were provided at the beginning and ends of shifts because mid-shift was too busy. Employees also said they were not reimbursed for the time and expense of caring for their work uniforms. The terms of the agreement will include compensation for lost wages, unpaid overtime, missed meals and breaks and unreimbursed business expenses for the uniforms.

McDonald’s also agreed to provide uniforms at no cost to the employees when their uniforms become too worn or damaged by grease and smoke from the kitchen area.

By not reimbursing the employees for the cost of time and financial expense to maintain or replacing their uniforms, the company could be in violation of the California Expense Reimbursement Law.

According to NPR, McDonald’s denied any wrongdoing and in a statement said the company was “deeply committed to the fair treatment of all of our employees.”

NPR also noted that McDonald’s employees in the U.S. have been organizing through Fight for 15, which is made of employees seeking to increase the minimum wage to $15 per hour.

In California, the current minimum wage is $12 per hour for workers at businesses with 26 or more employees. At small businesses with 25 or fewer employees, the minimum wage is $11 per hour in The Golden State. Effective Jan. 1, 2020, those minimum hourly wages will increase to $13 and $12 respectively.

The age of the worker does not matter; a teen should make minimum wage the same as an adult, according to California labor laws. Also in California, an employer is not allowed to credit an employee’s tips as a way to avoid the employer’s obligation to pay the minimum wage.

The California wage and hour claim is not the only legal battle McDonald’s has been facing. The company faces a lawsuit in Chicago alleging workers are not protected from customers who attack and harass them, particularly late at night. In Michigan, a former employee and the American Civil Liberties Union filed a lawsuit saying McDonald’s and one Michigan franchisee failed to stop sexual harassment of female employees.

Join a Free California Wage & Hour Class Action Lawsuit Investigation

If you were forced to work off the clock or without overtime pay within the past 3 years in California, you have rights – and you don’t have to take on the company alone.

Get a Free Case Evaluation Now