Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: New York Attorney General settles wage violation charges with NYC McDonald’s owner and franchises, (Mar 19, 2014)

By Linda O’Brien, J.D., LL.M.

Seven New York City McDonald’s restaurant franchises and their owner, Richard Cisneros, have agreed to pay almost $500,000 in restitution to workers for unpaid laundry allowances, uncompensated work time, and unlawful wage deductions, New York Attorney General Eric T. Schneiderman announced yesterday. The franchises were charged with failing to pay legally-required laundry allowances for many employees, failing to compensate employees for work time, and making unlawful deductions from wages that resulted when cashiers were required to cover cash register shortfalls. The settlement funds, which include damages and interest, will go to more than 1,600 mostly minimum wage workers who were shortchanged by the franchises.

The seven restaurants, all in Manhattan, are located at 280 Madison Ave., 1499 3rd Ave., 1872-74 3rd Ave., 809 6th Ave., 427 10th Ave., 871 2nd Ave., and 18 East 42nd St.

In addition to paying the restitution funds, the settlement with the Attorney General also requires the seven franchises to submit to monitoring of their labor law compliance. The restaurants will also institute complaint procedures, provide bilingual written handbooks to employees, train supervisors on the labor law, and post a statement of employee’s rights.

The Attorney General’s investigation found that, from 2007 to July 2013, the Cisneros Group restaurants failed to pay certain of their 700 cashiers for time periods when they were required to work “off-the-clock” before and after some of their shifts. The restaurants also required some cashiers to make up cash register shortages out of their own money when the registers were short of funds at the end of the workers’ shifts.

“I want to commend Attorney General Schneiderman for investigating the owner of seven McDonald’s franchises for what amounts to wage theft,” said Jonathan Westin, executive director of New York Communities for Change. “This money will go to workers who should have received it in the first place. This settlement, and the $3.9 million settlement the Attorney General reached earlier this month for car wash workers, is a clear signal that unscrupulous owners will not be tolerated and that we will continue to fight on behalf of these workers. McDonald’s must ensure that its franchise holders abide by the law and treat workers fairly.” New York Communities for Change referred employee complaints to the Attorney General’s Office.

“Like every other business in New York State, fast food employers must follow our labor laws,” Attorney General Schneiderman said. “Our lowest wage workers deserve the same protections of the law as everyone else. It’s critical, for them and for their families as well as for our economy, that we remain vigilant so that no New Yorkers are cheated out of their hard won earnings.”

Companies: McDonald’s Corporation

News: FranchisingDistribution NewYorkNews