USA 
United Kingdom
It’s not such a Happy Meal for the McDonald's payroll team to swallow down at present, with the fast-food chain set to reimburse 40,000 current and former employees after a payroll issue that lasted 11 years.
The payroll errors relate to McDonald’s staff who worked in its New Zealand branches between November 1, 2009, and December 6, 2020.
A spokesperson for the Golden Arches did not confirm exactly how much the company plans to pay out but estimated it would be in the low tens of millions of dollars, according to the New Zealand Herald.
How did McDonald’s incur such huge payroll errors?
The payroll errors at McDonald’s occurred as the company miscalculated annual leave and leave pay entitlements, alongside hundreds of other employers who misinterpreted New Zealand’s 2003 Holidays Act.
The Ministry of Business, Innovation, and Employment (MBIE) has been working with McDonald’s and other employers to identify where obligations for remuneration were incorrectly interpreted and to execute the process of reimbursement.
“The project has been one of the most complex remediations undertaken and completed to date,” the McDonald’s spokesman stated.
“McDonald’s worked with MBIE, current and former franchisees, and third party experts, spending millions of dollars and tens of thousands of hours to get to the point where we can commence the remediation payments.”
Not all McDonald’s staff will receive reimbursement
Together, McDonald’s and MBIE have established formulas to determine how much remuneration the affected individuals are owed.
Payouts will vary based on their tenure, the variability of hours worked, and the variability of pay rates, the New Zealand Herald reports. Current or former employees will receive their reimbursement payment within a month after agreeing on a value with the owner(s) of the location(s) in which they worked.
“Current and former staff of company-owned and franchisee-owned restaurants, who worked during the remediation period, are encouraged to check the McDonald's payroll remediation portal,” a message on McDonald’s NZ website reads.
“Wife got $1200 I got $3000, nice little surprise,” one person claimed on a Reddit forum.
While that individual may be lovin’ it, not all will be as pleased.
Some current and former employees staff will not receive reimbursement, the McDonald’s spokesperson explained.
In some cases, the franchisee owner closed their company before MBIE began investigating the errors made by employers in their interpretation of the Holidays Act in 2015/16, meaning reimbursement is not possible.
Other franchisees opted out of collective remediation, and an MBIE spokesperson said that a small number of franchisees aren’t currently in a position to pay out the money they owe in full.
“It is important that they do not hold up the majority [of franchisees] that are ready, so that as many employees as possible can receive their payments now,” they explained.
Other users on the Reddit forum reported cases where they were denied reimbursement. “Our old franchisee is refusing to pay lol fml,” said one person.
From retention to risk reduction: How to deliver training to improve employee experience
There are a range of challenges facing people leaders when it comes to creating a compelling employee experience. It can be difficult to keep workers engaged, particularly where training & development is concerned. But whether it's compliance risk through mandatory training, or retaining staff through career skills building, it's business-critical for effective learning programs to enhance the employee experience.
Join us for a webinar hosted in partnership with WILL Interactive to learn how to deliver training to improve workplace culture and the bottom line.
The webinar will cover:
How the training you provide can elevate or diminish the employee experience
The benefits a more modern training experience can bring to the organization include retaining staff, addressing competency gaps, and even reducing compliance risk for mandatory training
The role exceptional training can play throughout the process of employee and workforce development
HR Grapevine is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP® or SHRM-SCP® recertification activities.
Another added: “$400 from one franchise, $0 from another franchise. One former manager of mine was owed over $10,000... That’s A LOT of underpayment.”
The McDonald’s spokesperson advised any current or former employee to liaise with MBIE if they felt they were entitled to reimbursement from a franchisee not part of the collective remediation.
They also noted that while there had been millions of dollars of underpayments, McDonald’s had also overpaid staff too much—but confirmed that these individuals wouldn’t be required to repay McDonald’s.
