McDonald’s franchise operators agree to pay nearly $260,000 in backwages, damages and penalties

McDonald’s franchise operators Gold Hat Inc. and Gold Hat II Inc., which have the same owner and are based in Annapolis, have agreed to pay $254,224 in back wages and liquidated damages to 138 employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division, which determined that violations of the minimum wage, overtime and child labor provisions of the Fair Labor Standards Act occurred at nine of the operators’ restaurant locations throughout Maryland. The employer has also agreed to pay $4,300 in civil money penalties for the child labor violations.

The restaurant industry employs some of the most at-risk workers that we see,” said Mark Lara, director of the Wage and Hour Division’s Baltimore District Office. “These employees were denied wages they had rightfully earned working long hours for this employer. This investigation demonstrates our commitment to enforcing the law, which benefits both workers and employers. Workers get the pay they deserve, and we maintain a level playing field for employers when everyone plays by the same rules.”

Gold Hat Inc. operates four McDonald’s restaurants, and Gold Hat II Inc. operates another five restaurants. Investigators from the division’s Baltimore District Office found that when employees worked at more than one location for the employer during the same workweek, the hours they worked at the different locations were not totaled to determine if overtime was due. Instead, employees received separate checks from each location, all at straight-time rates, even if they had worked a total of more than 40 hours. 
 
Investigators also found that both operators took deductions from employees’ pay for cash register shortages, which illegally reduced some employees’ rates of pay below the mandatory minimum wage of $7.25 per hour. Finally, the investigators determined that ten 14- and 15-year old employees worked outside of the hours permitted by federal child labor regulations. 
 
In addition to paying the back wages, liquidated damages and penalties, the Gold Hat companies also agreed to enhanced compliance measures, including conducting an internal audit to evaluate compliance with minimum wage, overtime, wage deductions, child labor and worker classification requirements; providing training covering the employers’ responsibilities under the FLSA; and implementing practices with respect to the FLSA’s child labor provisions, including highlighting the names of minor workers on the schedule to alert managers to their status and posting child labor requirements in a conspicuous place.

Source: DOL

This information is intended to be educational and should not be considered legal advice on any specific matter.