McDonald’s accused of $1m wage loss

McDonald’s workers could have missed out on lieu days or correct pay at least twice a year for nearly a decade, a union group claims.

Unite Union extrapolated from 50 employees’ wage and time records dating back three months, and found that the burger chain may owe each of its workers at least $150 a year in the value of their missed lieu day or holiday pay twice a year.

It comes after a decision by the Employment Relations Authority (ERA) in November 2017, which stated that fast-food chain Wendy’s method of calculating holiday pay and lieu day entitlements did not comply with the law.

Unite Union’s national director, Mike Treen, said it wanted McDonald’s to get rid of its three-week formula, which only gave a day in lieu to employees working the same day of the week over the three preceding weeks.

In the ERA determination, the authority said Wendy’s calculations of day-in-lieu entitlements with a three-week test was illegal and ordered it to consider the circumstances of each employee on a case-by-case basis.

Treen said despite having come to an agreement with McDonald’s to change the three-week test to three out of five weeks, the union was asking for a further amendment to day-in-lieu entitlements to seven out of 13 weeks.

‘‘We want McDonald’s to recognise a three-month average for calculating days in lieu and go back nine years to give employees what they’re owed.’’

McDonald’s New Zealand spokesman, Simon Kenny, said the company’s situation was different from that of Wendy’s because it had already agreed with the union to extend the three-week test to three-out-of-five for calculating alternative holiday or lieu days.

‘‘We are working to the best of our ability and in consultation the Ministry of Business, Innovation and Employment to ensure the process followed provides a fair outcome for current and former employees,’’ Kenny said.

McDonald’s was also working with a third-party payroll expert to audit another problem it had found regarding annual leave payment calculations, he said. ‘‘We have committed to do everything we can to pay whatever is owed to current and former employees.’’

Treen said, with about 9000 staff losing on average two days’ pay each year, the lost wages could be worth more than $1 million a year.

The ERA ordered Wendy’s to review all public holidays worked by all staff members across all 23 stores since 2012 and credit anyone with a day in lieu if they should have been entitled to one, or pay them the dollar equivalent if they no longer worked there.

Labour Inspectorate national manager Stu Lumsden said it was also working with McDonald’s to resolve the issues of pay affecting workers in jobs that have fluctuating hours.

‘‘McDonald’s is co-operating with the inspectorate to resolve these issues, and we continue to monitor their progress with the expectation where applicable they will fix their systems and pay any remediation owed,’’ Lumsden said.

‘‘We are working with other large employers to ensure they address issues of non-compliance – but with this work ongoing the details we can provide at this time are limited.’’