The Department of Labor fined three McDonald’s franchisees a total of $212,000 for 305 child labor violations across 62 stores.
Last year, the United States saw 835 cases of child labor violations, with an average of five minors involved per case, according to the U.S. Department of Labor. This year, government bodies have fined franchisees of McDonald’s, Dunkin’ and other major brands for such violations, including the employment of two 10-year-old boys.
“These reports are unacceptable, deeply troubling and run afoul of the high expectations we have for the entire McDonald’s brand,” Tiffanie Boyd, senior vice president and chief people officer of McDonald’s USA, said in a statement. “As a mother whose teenage son proudly worked at our local McDonald’s, I feel this on a very personal level.”
McDonald’s franchisee Bauer Foods LLC was fined in May for employing two 10-year-old children in a Louisville, Kentucky, restaurant. The department accused the franchisee of allowing 24 children under 16 to work more hours than allowed. The franchisee had the two 10-year-olds working unpaid as late as 2 a.m.
According to a statement McDonald’s issued to Franchise Times, the children were those of the restaurant’s night manager and Bauer Foods didn’t approve them to work. In a statement to Franchise Times, Sean Bauer, owner of Bauer Foods, said, “We have since taken steps to ensure our policy regarding children visiting a parent/guardian at work is clear to all employees.”
McDonald’s owners were fined a total of $212,000 for violations across 62 stores in Kentucky, Maryland, Ohio and Indiana. Those 62 stores are franchised by Bauer Foods, Archways Richwood LLC and Bell Restaurant Group I LLC. The investigation found the three franchisees had 305 minors working more hours or performing prohibited duties.
The Massachusetts attorney general fined Dunkin’ franchisees in April of this year, totaling $370,000 for violations in 27 stores. In May, a California Subway operator was accused of similar offenses.
Who’s responsible?
While the franchisor is often seen by the public as the perpetrator for labor violations, in cases like these the franchisee is the one at fault, said Martha Doty, a labor and employment attorney. This led to conversations about joint employment.
Martha Doty
“They’re walking a fine line because they don’t want to have any joint-employer liability for these violations that really are entirely in the control of the franchisee,” said Doty, a lawyer at Alston & Bird. “They have to distance themselves but at the same time, because the brand is implicated, have to state that this is not acceptable to the corporation.”
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Earlier this month, the California Assembly passed a bill that would make franchisors liable for a franchisee’s labor practices. Typically, by the time a franchisor hears something is wrong, it’s already public information—and they would like to keep it that way to avoid legal recourse, Doty said.
“In the joint-employment context, franchisors have been able to say, ‘Look, we don’t control the wages, hours or working conditions of the employees of our franchisees. There’s distance between us and we want that distance because they’re independent business people,’” said Doty.
The dance of not being overly involved in the day-to-day operations while still being the “face” of the company puts the franchisor in a complicated spot when these legal issues spring up, she said.
“The industry is following bills like this one working its way through California,” said Doty. “It seems to me they have to do what is necessary to ensure that a franchisee has basic systems in place that will permit them to properly account for time and pay their workers, but without getting involved in the franchisee’s business.”
What franchisees can do
Brands nationwide are struggling to find employees. While Bauer Foods had an unusual example, most violations happen to teenagers who are working hours or using machinery they shouldn’t be, said Sarah Diehl, founder and principal of Empowered Hospitality, a human resources company that assists hospitality businesses.
“It’s shocking in the sense that I believe that it shouldn’t happen, but it’s not shocking to know that people do cut corners in our industry sometimes,” said Diehl. “Whether it’s employing unauthorized workers or minors, those are what I consider to be more of lazy solutions to a problem that’s pretty hard to solve.”
Sarah Diehl.
Lack of staff is usually the reason behind rule bending, Diehl said. Finding and keeping qualified staff is a challenge, but there are ways to get help.
The industry’s turnover rate is about 70 percent, she said. To mitigate turnover, there are many factors to consider, Diehl said. Culture is often the root factor as to why someone leaves a job, in Diehl’s experience.
“Culture goes hand in hand with hospitality having the highest incidence of harassment and discrimination of any industry,” said Diehl. “Very often, you take a job that appears great at face value, and then you find out that there’s something toxic or negative in the culture and end up leaving very shortly after you started.”