McDonald's Will Pay $26 Million to Settle California Wage Theft Claims

Author: David B. Weisenfeld, XpertHR Legal Editor

December 3, 2019

McDonald's has agreed to pay $26 million to settle a class action lawsuit that accused the fast-food chain of widespread wage theft. The lawsuit claimed that McDonald's underpaid 38,000 workers at its corporate-owned California restaurants by failing to give them adequate meal or rest breaks and structuring shifts to deny workers overtime pay.

The workers said that McDonald's only allowed breaks at the start and end of their shifts, rather than in the middle of their shifts when the restaurants got busy. They also claimed that the chain required them to clean or replace their uniforms when they were worn out or damaged on the job without compensation.

As part of the settlement, McDonald's agreed to train employees at its California locations about their rights, including:

  • Receiving 10-minute breaks roughly every two hours;
  • Receiving overtime for working more than eight hours in a 24-hour period; and
  • Getting new uniforms at no cost if needed.

In a statement, McDonald's denied any wrongdoing and said it was "deeply committed to the fair treatment of all of our employees."

In 2016, the company agreed to resolve similar claims in a separate wage theft class action involving workers at its California franchise locations. Elsewhere, class actions in Michigan and New York also have accused McDonald's of wage theft.

Several states have taken measures to combat wage theft. For instance, California's Fair Day's Pay Act allows a company's owners, directors, officers or managing agents to be held personally liable for certain wage and hour violations.

And effective January 1, 2020, Colorado employers could face criminal charges if they willfully fail to pay wages exceeding $2,000. The new law defines the failure to pay employee wages as theft and upgrades violations from their current misdemeanor status to being felonies.

An Oregon law also aims at deterring wage theft by tightening up pay statement requirements for employers.