The Issue of McDonald’s Employee Compensation in Arizona
McDonald’s is one of the largest fast-food chains globally, with over 38,000 restaurants spread across 120 countries. While the company continues to grow, its employees are facing one significant issue that has been at the forefront of many complaints: low pay. As a result, when the lawsuit was filed against the McDonald’s franchise in Arizona in 2017, workers couldn’t help feeling a sense of vindication.
The lawsuit was filed against six McDonald’s restaurants in Arizona, alleging that they were not complying with the Arizona Minimum Wage Act. After investigations, it came to light that the franchise was paying less than the minimum wage. This led to an agreement between the franchise and the workers’ attorneys that required the franchise to pay a total of $3.4 million to the affected workers. The settlement made up for unpaid wages and restitution for compensation that employees may have wrongly given to the employer. While this settlement was significant, it only offered a glimpse into a much more significant issue – the compensation structure of McDonald’s employees in Arizona.
Fight for $15
McDonald’s has been at the forefront of this issue for many years now. In 2015, a campaign called the ‘Fight for $15,’ which demanded higher wages and better work conditions for fast-food workers, was started. As a result, over twelve states, including Arizona, increased their minimum wage, giving millions of minimum-wage earners a pay raise.
The Compensation Issue
To understand the compensation structure of McDonald’s employees in Arizona, it is essential to consider the minimum wage and the Fair Labor Standards Act (FLSA), which govern how employees are paid. While the minimum wage in Arizona is $12 an hour, set to increase incrementally until it reaches $15 per hour by 2022, the FLSA only requires that employees be paid the federal minimum wage, which is $7.25 per hour. This means that in Arizona, employees are allowed to pay their workers less than $12 per hour, provided they pay them the federal minimum wage.
Despite the minimum wage provision, McDonald’s employees in Arizona experience the same issues as most fast-food workers – low pay, unpredictable and inconsistent work schedules, and insufficient hours. A former McDonald’s employee revealed that they earned barely above the minimum wage in their three years working with the franchise. Aside from low pay, they also received erratic schedules, making it impossible to maintain a stable life outside of work. They had to take on other jobs to make ends meet.
From this, we can infer that McDonald’s employee compensation in Arizona is insufficient for its workers’ subsistence, and their work conditions are far from ideal. As a result, the fundamental issue of employees’ compensation needs to be reevaluated and restructured to provide a livable wage.
According to the National Employment Law Project, McDonald’s workers in the United States are paid an average of $8.69 per hour, barely above the federal minimum wage. This disparity between the wages of the CEOs, who earn millions, and the workers’ salaries is a significant source of tension between McDonald’s and its employees. The situation has led to strikes and protests as fast-food workers demand higher pay and better work conditions.
McDonald’s and other fast-food chains must reassess and improve the pay and work conditions of their workers. The settlement made between the McDonald’s franchise and workers in Arizona for an alleged violation of the Arizona Minimum Wage Act only exposes the tip of the iceberg of a much more significant issue concerning employees’ compensation. As it stands, workers’ compensation, particularly those in the fast-food industry, requires a complete structural overhaul for a livable wage that ensures workers, particularly those at the lowest level, can afford their basic needs.