In May, three Louisville, Kentucky-area McDonald’s franchisees were ordered to pay over $212,000 in civil penalty fines after a Department of Labor investigation found over 300 minors – including two 10-year-olds – working more than their legally permitted hours.
According to franchisee Bauer Food LLC, which was assessed $39,711 in civil money penalties, the two 10-year-olds “allegedly employed were children of a night manager who were visiting their parent at work and were not approved by the franchise organization management to be in that part of the restaurant.”
Bauer added that any “work was done at the direction of – and in the presence of – the parent without authorization by the franchisee organization, and that the organization has since taken steps to ensure its policy regarding children visiting a parent/guardian at work is clear to all employees.”
In reference to these violations, Tiffanie Boyd, senior vice president and chief people officer of McDonald’s USA, called the reports “unacceptable, deeply troubling and afoul of the high expectations we have for the entire McDonald’s brand.”
Boyd added the company is committed to “ensuring our franchisees have the resources they need to foster safe workplaces for all employees and maintain compliance with all labor laws.”
But that defense, as well as Bauer’s policy clarification, may not be enough to appease a coalition of the company’s shareholder groups that are now demanding the chain agree to a third-party human rights assessment. The Washington Post first reported the request, citing a letter sent to McDonald’s board last week from more than 30 signatories, including the Illinois state treasurer and New York City comptroller.
The letter read, in part: “McDonald’s child labor violations pose an increasing legal and reputational risk to shareholder value.” The shareholders cite reporting from the Food and Environment Reporting Network, claiming that McDonald’s franchises committed nearly 9% of all child labor violations between 2018 and 2022.
McDonald’s shareholder coalition is asking the board to adopt a zero-tolerance policy in its global brand standards for such violations from its franchisees. It is also asking for the audit to be completed and made public by the end of this year. The company didn’t respond to an inquiry about whether it will agree to the request.
With that 2018 starting point in mind, and at a glance, a Michigan McDonald’s operator was fined $26,000 in child labor fines in 2018. That same year, 11 New Jersey McDonald’s locations were also hit with fines for child labor violations. From 2020 through 2022, McDonald’s operators in North Carolina, Idaho and San Diego were also slapped with child labor fines. Further, in December 2022, a Pittsburgh-area McDonald’s franchisee paid more than $57,000 in civil penalties to resolve child labor violations at 13 restaurants following a federal investigation. And, in March, a 15-year-old McDonald’s employee in Tennessee received hot oil burns while using a deep fryer.
Despite these instances, McDonald’s USA called the Food and Environment Reporting Network’s report “inaccurate and a blatant misrepresentation” of the company and the experience young employees have working in a restaurant. The company added it takes any child labor violation “extremely seriously,” but adds that these issues across the system are “extremely rare” throughout its 14,000-unit system and its 800,000 employees. The company called the report “intentional disparagement of the restaurant industry by special interest groups.”
Notably, McDonald’s isn’t the only restaurant chain that has been slapped with child labor fines. In the past year alone, Chick-fil-A, Little Caesars and Chipotle have as well and, in fact, the Department of Labor found that 688 minors were illegally employed in hazardous occupations in fiscal year 2022, the highest annual count since fiscal year 2011. Quick-service chains McDonald’s, Subway and Dunkin’ had the most violations, according to the department.
Zooming out a bit, the shareholder coalition’s request illustrates some of the challenges posed by the franchisor/franchisee relationship. The question of “who is responsible for what” has been in a brighter spotlight since about 2014, when the National Labor Relations Board ruled that McDonald’s could be regarded as a joint employer, a ruling that has gone back and forth since. (A new joint employer standard is expected to be issued this year). What we know now is this – only McDonald’s franchisees have been fined for child labor violations, but shareholder pressure isn’t ignorable. And at the franchisor level, McDonald’s has found itself in a similar position before; last year, a majority of shareholders voted for a civil rights assessment through a third-party firm, which the company agreed to. The child labor issue seems to be a bit more of a moving target; as these violations have increased, at least 10 states have either passed or pushed for looser child labor laws. In February, the Biden administration introduced a plan for stricter enforcement of child labor law violations, but that plan has yet to move forward.
Contact Alicia Kelso at [email protected]