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News Article Analysis: McDonald’s Franchisee Pays Back Wages

April 19th, 2014 by Sarah Frye

The Baltimore Business Journal recently printed an article about how a local Maryland franchisee of McDonald’s must pay more than $250,000 to 138 employees in civil money penalties for child labor violations.  This article is an example of how franchisees, even from the largest franchise brand in the world, could benefit from working with a PEO to correctly manage human resources issues. If this franchisee was working with an organization like Infiniti HR, this situation would have been avoided all together; saving the company money and media strife.

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Annapolis-based McDonald’s Franchisee Agrees to Pay Back Wages
Baltimore Business Journal
Ryan McDonald Digital Producer
Apr 8, 2014, 12:44pm EDT

An Annapolis-based McDonald’s franchisee has agreed to pay more than $250,000 in back wages and damages to employees as part of a settlement with the U.S. Department of Labor.

Gold Hat Inc. and Gold Hat II Inc. violated the minimum wage, overtime and child labor provisions of the Fair Labor Standards Act at nine of the franchisees’ restaurant locations throughout Maryland, the U.S. Department of Labor determined.

In total, the franchisees will pay $252,224 to 138 employees. The employer has also agreed to pay $4,300 in civil money penalties for child labor violations.

Gold Hat Inc. operates four McDonald’s restaurants, and Gold Hat II Inc. operates another five. The Labor Department claims that when employees worked at more than one location for the employer during the same workweek, the hours they worked at the different locations were not totaled to determine if overtime was due.

Additionally, the federal agency says that 14- and 15-year old employees worked outside of the hours permitted by federal child labor regulations.

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Summary
Article Name
News Article Analysis: McDonald's Franchisee Pays Back Wages
Description
This article is an example of how franchisees, even from the largest franchise brand in the world, could benefit from working with a PEO to correctly manage human resources issues. If this franchisee was working with an organization like Infiniti HR, this situation would have been avoided all together; saving the company money and media strife.
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