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McDonald’s could pay up to $29M to New Zealand workers after miscalculations

McDonald’s has agreed to pay what could be tens of millions of dollars to New Zealand employees after becoming embroiled in a nationwide payroll debacle, according to CNN Business.

McDonald’s spokesperson, Simon Kenny is quoted as saying the fast food giant will pay back all past and present employees in the past 10 years for miscalculated holiday wages.

This agreement follows a years-long campaign by local labor union, Unite Union, which Kenny said represents about 7% of McDonald’s New Zealand employees. He estimated that about 40,000 employees were affected. The union, however, gave a much higher estimate. In a statement released on Monday, the union said, “It is possible that every person who worked for McDonald’s after November 2009 is owed some money.” It added that it believes “as many as 60,000 staff and millions of dollars will be involved.” The union’s national director, Mike Treen, estimated that the remediation may cost McDonald’s at least 45 million New Zealand dollars (almost $29 million).

Both Kenny and the union pointed out that this isn’t an isolated incident — rather, it’s part of a much larger problem that has seen employees underpaid in the public and private sectors across New Zealand.

Unite Union said it first raised the issue with McDonald’s in 2015, accusing the company of “stealing” annual leave from employees by not properly paying them for working public holidays and failing to provide compensation rest days. Since then, the company has been working with both McDonald’s and the Ministry of Business Innovation and Enterprise (MBIE), the New Zealand government agency that enforces economic policies, to reach an agreement.

“We have spent tens of thousands of hours working on what is a hugely complex project, in order to ensure the approach to making calculations is correct,” Kenny said in a statement to CNN Business. “With the agreement in place we can now start the process of doing individual calculations.”

McDonald’s is just one of many companies that have been swept up in the nationwide payroll problem -— more than 150 companies are currently being audited, according to MBIE. 

In 2016, the government estimated that up to 763,000 employees nationwide could be owed wages, and the total cost of remediation could reach 2.2 billion New Zealand dollars (about $1.4 billion), Radio New Zealand reported.

Source: CNN Business

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