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McDonald’s to pay $26 million to settle California wage lawsuit

McDonald’s Corp agreed to pay $26 million to settle a nearly seven-year-old lawsuit accusing the fast food chain of underpaying U.S. staff at its corporate-owned restaurants in California.

The preliminary settlement resolves claims that the company used a timekeeping system that cheated workers out of overtime, barred workers from taking rest breaks during their shifts, and forced workers to clean and iron their uniforms out of pocket.

It resolves claims by about 38,000 cashiers and cooks in California, and is the largest wage settlement against Chicago-based McDonald’s in the United States, representatives for the plaintiffs said.

The accord requires McDonald’s to pay required overtime, track pay electronically, provide rest breaks during rather than at the start or end of shifts, and provide replacement work uniforms when old uniforms become damaged or worn out.

McDonald’s denied wrongdoing as part of the settlement. The accord requires court approval.

In a statement, McDonald’s said it still believes its employment practices complied with California labor law. It also said it is improving training at company-owned restaurants “to promote continued compliance with all wage and hour laws.”

McDonald’s has long been a target of labor organizers who claim it underpays workers and provides unsafe working conditions at company-owned and franchised restaurants.

On Nov. 12, the American Civil Liberties Union and workers in Michigan sued McDonald’s for allegedly allowing sexual harassment to flourish at its restaurants.

Then on Nov. 21, a group of Chicago-area workers sued McDonald’s and several franchisees over a recent restaurant redesign that they said left them vulnerable to physical attacks by angry customers.

Lawyers for the California workers may seek fees of up to one-third of the settlement amount, according to court papers.

McDonald’s has roughly 14,000 U.S. restaurants, of which approximately 95% are franchised. It has more than 38,000 restaurants worldwide.

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Under California Law, when a non-exempt employee works over eight hours in a workday, and/or over 40 hours in a workweek, an employee is entitled to overtime pay at a “time-and-half” rate for all extra hours worked. Non-exempt employees are also entitled to take meal and rest periods. An employee does not have to waive those meals and rest breaks – even if an employer asks the employee to do so.

Employers often wrongfully classify non-exempt employees as “exempt” because they are managerial employees or receive a salary. The rules for what determines whether an employee is exempt are very specific. Misclassified employees are deprived of their right to receive overtime pay and meal and rest periods.

Potter Handy Employment Rights Law Firm handles violations of the California Labor Code on both an individual and class basis. We bring claims under the California Private Attorney General Act of 2004 (“PAGA”), which provides employees with a private right of action to collect penalties on behalf of the State of California, the individual employee, and other employees similarly aggrieved.

Contact us today to take legal action to obtain the money your employer owes you under California’s wage & hour laws. Call us at (858) 365-9722 or contact us online for a free consultation and comprehensive case evaluation. https://potterhandyemployment.com/our-services/wage-and-hour/