The National Labor Relations Board ruled on July 29 that McDonald’s could be named as a joint employer, a decision with significant implications for franchise operations control and labor practices scrutiny. This would potentially bring the company under closer scrutiny with regard to its labor practices. In March, employees of the company from three different states filed lawsuits alleging that the company used software to control labor costs. If costs were too high at any given point, employees were told to wait before clocking in, raising concerns about work off the clock violations and minimum wage laws compliance.
According to the NLRB, 181 cases have been filed against the company since 2012, and of the 181 cases presented, 43 were considered to have merit. The other cases are being investigated or have been considered to not have any merit. While the NLRB ruling McDonald’s decision was considered a victory for workers pursuing wage and hour claims, a company representative said it would be appealed. The representative also said that the repercussions of the ruling should cause concern to business professionals throughout the country.
A representative from the International Franchise Association claims that franchisees could lose control of their operations if the parent company is considered a joint employer. This could also subject franchisees to be classified as a large employer, which would subject it to a possible $15 minimum wage in Seattle sooner than small employers under new wage laws. The joint employer classification affects how federal labor laws and state labor laws apply to franchise businesses and their employment practices.
Employees are not supposed to be pressured to work off the clock or be asked to rearrange their hours to avoid overtime pay or other costs that may result from an employee working more than 40 hours a week. An employment law attorney may be able to take action against employers that violate state or federal labor laws. If successful, an attorney may be able to win compensation for lost wages as well as possible punitive damages for affected workers pursuing employee lawsuits over overtime pay claims and other labor law violations.
Source: ABC News, “McDonald’s Could Be Liable for Labor Practices”, Candice Choi, July 29, 2014
