McDonald's Says Chinese Labor Officials Clear Company Of Violations

Wednesday, April 11th 2007, 7:16 am
By: News On 6

SHANGHAI, China (AP) _ China's labor authorities have cleared McDonald's of any violations of wage and other regulations, the company said Wednesday, although state media said officials had uncovered problems with overtime and contract procedures.

McDonald's China notified its headquarters in the U.S. that labor officials in Guangdong province, which borders Hong Kong, found the company in compliance with wage and labor rules, the company said in a statement.

Allegations against McDonald's Corp., KFC and Pizza Hut arose after a state-run newspaper in Guangdong reported that the companies were paying some workers up to 40 percent less than the local minimum wage of about $1 per hour.

The companies defended their labor practices but said they were consulting with the government regarding recent amendments to labor regulations.

``McDonald's China notes with satisfaction the official declaration by the Guangdong Labor Authority that our company has been found in compliance with the relevant labor laws and that our interpretation of those laws has been correct,'' the company said.

The allegations apparently arose because many of the part-time workers at fast-food outlets like McDonald's and KFC are students who are not protected by the usual minimum wage rules.

China's labor laws are evolving and ``changing at a rapid pace,'' the McDonald's statement noted. ``As a responsible employer in China, we stand ready to play our part in that process.''

Labor officials in Guangdong could not be immediately reached for comment Wednesday. However, a report by the official Xinhua News Agency claimed that authorities had not completely absolved McDonald's and KFC of any violations.

It said the investigation found violations in labor contract procedures and in pay for overtime. The report omitted any reference to the dispute over minimum wage levels.

Responding to that report, McDonald's China said it had received a ``positive declaration'' from the Guangdong labor authorities regarding its hiring practices.

``The Guangdong Labor Authority already ruled that labor contracts are not required for students or part-time employees,'' the company said in a separate statement. ``If and when any further direction is given by the Guangdong Labor Authority we will absolutely comply and fully support,'' it said.

The flap over the fast-food giants' treatment of its part-time staff prompted both McDonald's and Yum Brands Inc., operator of KFC and Pizza Hut, to pledge to allow branches of China's state-sanctioned labor federation in their China outlets.

On Tuesday, labor officials in Shanghai said they had found no violations of the minimum wage regulations in McDonald's and KFC outlets there because those regulations do not apply to hourly wages paid to part-time or student workers.

Results of investigations in other cities and regions have not been announced.