U.S. fast-food chains McDonald’s and KFC said Thursday they are working with Chinese authorities to resolve allegations that the companies underpay their part-time workers, as a labor probe expands to other cities.
Labor bureaus in southern China’s Guangdong province began investigating after the state-controlled newspaper New Express Daily reported that McDonald’s, KFC and Pizza Hut were paying part-time workers less than the local minimum wage of about $1 an hour.
The companies said they were seeking clarification of labor laws, while China’s government-affiliated trade union demanded redress, noting that probes had begun in other provinces and cities, including Shanghai.
The All-China Federation of Trade Unions, the national umbrella group for government-approved unions, is in the midst of a campaign to boost the group’s presence in foreign companies, which employ some 25 million people in China but until recently resisted allowing labor organizing.
The state-run Xinhua News Agency carried a report Thursday claiming that McDonald’s Guangdong had agreed to allow ACFTU to set up branches in its outlets, but McDonald’s China spokesman George Gu said he was not aware of any such decision.
McDonald’s and Yum Brands Inc., which operates KFC and Pizza Hut, said they were seeking clarification regarding recent changes in labor regulations.
“No one cares more about our workers than we do,” McDonald’s China said in a statement seen Thursday. “The fact is, government officials make decisions on local labor laws. That’s why we continue to work with local officials to get further clarity on their recently amended labor laws,” it said.
McDonald’s China was “surprised” by the allegations against it, it said, adding that such claims of violations were “premature.”
“To our knowledge the labor authorities have not made any determination,” it said.
A spokeswoman for Yum in China said the company was also seeking clarification but did not have any new statements.
Minimum wages vary from region to region in China. The minimum wage for Guangdong province is 7.5 yuan, or 97 cents, per hour.
The New Express Daily report said McDonald’s was paying part-timers, many of whom are college students, only 4 yuan, or 52 cents, per hour. It said part-timers at KFC earned 61 cents and those at Pizza Hut earned 65 cents.
The report also accused the restaurants of demanding part-time employees work the hours of full-time staff but failing to pay them any full-time staff benefits.
In a statement, the ACFTU urged the companies to redress any underpayment. Results of the investigations were due to be released soon, it said. Trade union officials declined comment, referring reporters to the statements posted on their Web site.
An official at the Shanghai Labor and Social Security Bureau confirmed his department was looking into the issue.
“We are cooperating with the local workers’ union to investigate the relevant companies,” said the official, who like many Chinese would give only his last name, Wang.
“We should take legal action if we find it is ture that they underpaid their employees,” he said.
But the official would not comment on what kind of legal action they might take, saying the probe was still underway.
An official at the Municipal Department of Labour and Social Security in Guangzhou, Guangdong’s capital city, likewise threatened “proper legal action,” but would not elaborate.