McDonald's, KFC, and Pizza Hut franchises in Guangdong have recently been criticized for
paying their part-time Chinese employees just US$52 cents per hour,
40 percent less than local statutory minimum wage requires. The
discovery has resulted in public outcry and media attention
McDonald's, KFC to Establish
McDonald's and KFC, both of which have been heavily criticized
recently for underpaying their part-time workers in Guangdong, are to set up trade union branches
across the province.
Speaking yesterday, Kong Xianghong, vice-chairman of the
Guangdong Provincial Trade Union Federation, said: "McDonald's has
set up a preparatory committee, comprising representatives of both
employees and management, to help set up the union, and it is hoped
the branches will open in May.
"Also, Yum! Brands Inc (the operator of KFC)'s Guangdong branch
has approached the local trade union federation for guidance on
setting up trade unions."
Kong said that an inter-regional committee of trade unions might
be established for both McDonald's and KFC.
Fast-food Firms Accused of Making a
Question: How much does a
part-time worker at McDonald's earn in one hour?
Answer: Four yuan (52 cents), or
slightly less than the price of two ice-cream cones.
Such is the claim of a report published last month,
which alleged the burger chain, along with fellow US fast-food
giants KFC and Pizza Hut, pays its part-time workers in Guangdong
far less than the legal minimum wage of about $1 an hour.
The report said that McDonald's pays its
part-timers, many of whom are college students, just 4 yuan per
hour, a shade less than KFC, which pays 4.7 yuan (61 cents) and
Pizza Hut, 5 yuan (65 cents).
Media in a further 10 cities, including Beijing,
Shanghai, Tianjin, Taiyuan and Fuzhou, later reported similar
The reports have caused uproar across the
KFC to Follow Rules over Its Alleged
Exploitation of Staff
KFC will accept whatever ruling the Chinese government makes
over its alleged illegal exploitation of part-time staff in China,
said a president of Yum Brands Inc. at a press conference
celebrating the company's 20 years in China on Monday.
"Although China's trade unions haven't concluded their
investigations into the employment of part-time workers by KFC, we
will do whatever is required," said Su Shijing, president of China
operation for Yum Brands.
Apparently worried about a customer backlash that could affect
sales and profits, Su said he hopes the public will remain cool
during the government's investigation.
Criticism of several US fast-food chains was triggered by a
Guangzhou-based newspaper report in late March saying they are
underpaying and overworking their part-time staff.
China's All-China Federation of Trade Unions said on April 3 the
US fast-food chains KFC, McDonald's and Pizza Hut have violated
China's labor law. The federation along with the Ministry of Labor
are investigating the companies to determine if they illegally paid
their staff less than the minimum wage.
'Low Wage' Scandal: Not Just
The scandal involving US fast-food giants
McDonald's and KFC for alleged underpaying part-time employees
should serve as a reminder of the need to strengthen enforcement of
China's labor regulations.
The labor bureau in south China's Guangdong
Province has reportedly begun its probe into the case, in which
McDonald's and Yum Brands Inc, which operates KFC and Pizza Hut,
are accused of paying part-timers less than the Guangzhou minimum
wage of 7.5 yuan (US$0.97) per hour.
The cases make clear the necessity of increasing
protection under our existing labor laws.
For a long time, labor controversies concerning
underpaid workers have cropped up in both foreign and domestic
enterprises. They include world-renowned firms as well as obscure
local companies. The number of victims is believed to be large.
According to a survey by the Guangdong labor bureau
and a local university last year, the issue of underpaid
farmers-turned-city-workers has become a serious problem.
McDonald's Silent on Claim
of Union Branches
A senior south China trade union official said fast food giant
McDonald's has promised to set up union branches in Guangdong
Province outlets before July, but the company on Thursday refused
to confirm the claim and would not comment.
Kong Xianghong, vice chairman of the Guangdong Trade Unions
Federation, said his federation was confident McDonald's would
establish union branches in first half of this year.
However, he would not comment about union branches in KFC and
Pizza Hut restaurants, both operated by Yum! Brands Inc., which
were last week accused along with McDonald's of overworking and
underpaying their part-time staff.
Kong said that a preparation group including representatives of
employees and management had already been established, and both
sides had agreed on issues such as union fee payments.
"Helping overseas-funded enterprises set up trade unions is
beneficial to building harmonious labor relations," said Kong,
adding his federation had a duty to encourage all overseas-funded
enterprises set up trade unions.
Fast-food Giants Found
After completing its investigation, China's top trade union
ruled yesterday that McDonald's, KFC and Pizza Hut were guilty of
underpaying their staff in the city of Guangzhou, in violation of
China's labor laws.
The fast-food giants should immediately settle the case by
paying the workers in full and retroactively, said Li Shouzhen, a
senior official with the All-China Federation of Trade Unions
Speaking at a news briefing in Beijing, Li announced that "a
joint investigation by the Guangdong provincial trade union and the
labor authorities confirmed media reports about the companies'
unlawful practices. The federation will uncompromisingly fight any
practice that violates workers' rights."
Addressing solutions to the problem, Li stated that ACFTU had
instructed its Guangdong branch to negotiate with the companies on
behalf of the 3,000-odd part-time workers, most of them college
Fast-food Chains Exploit
Part-time Staff: Trade Unions
An official with the All China Federation of Trade Unions said
Tuesday the US fast-food chains KFC, McDonald's and Pizza Hut have
violated China's Labor Law and they will take action to protect
We have asked the Guangdong Province Federation to probe into
the employment of part-time workers by the US fast-food chains and
claim wage compensation on behalf of the workers involved, said the
Other trade unions such as the Shanghai Trade Union, and the
Hubei and Fujian federations have also made their voices heard.
Hubei Province Federation has asked subordinate organizations to
investigate local foreign fast food chains suspected of similar
Fast-food Giants 'Did Violate
China's top trade union announced yesterday that McDonald's, KFC
and Pizza Hut have violated the country's labor laws by underpaying
part-time workers in the southern city of Guangzhou.
The fast-food giants must correct their wrongdoings and pay the
workers retroactively, said Li Shouzhen, a senior official with the
All-China Federation of Trade Unions (ACFTU).
"A joint investigation by the Guangdong provincial trade union
and the labor authorities confirmed media reports about the
companies' unlawful practice," Li told a news briefing in
"The federation will uncompromisingly fight any practice that
violates workers' rights," he added.
Fast-food Trio Blasted for
'Low Wage' Scandal
China's senior trade union federation has taken McDonald's, KFC
and Pizza Hut to task for "underpaying" workers in Guangzhou.
After media reports pointed the finger at the fast-food giants,
a senior All China Federation of Trade Unions (ACFTU) official
said: "No company should enjoy special privileges in China.
Irrespective of how big or strong a company is or who owns it, no
company should be allowed to have in-house rules that violate the
Last week, Guangzhou-based New Express reported that the major
fast-food chains all stood guilty of "violating labor laws" by
underpaying part-time workers, the majority of who are college
students. The report detailed an undercover probe carried out by
the newspaper which discovered that workers in the three fast-food
chains were paid only 60 percent of the nominal wage while still
Fast-food Giants 'Violate Pay Rules'
At McDonald's, they're not loving it; at KFC, they are working
their fingers to the bone; and at Pizza Hut, they're not getting
enough dough, forget the toppings.
So says a popular local newspaper, which claimed yesterday that
the US fast-food giants are violating China's labor laws by
under-paying part-time workers by up to 40 percent in their local
The southern metropolis set the minimum wage at 7.5 yuan (US$97
cents) per hour for part-time workers at the beginning of this
year, higher than most parts of the country, according to the New
But McDonald's pays only 4 yuan (US$52 cents), KFC 4.7 yuan
(US$61 cents) and Pizza Hut 5 yuan (US$65 cents) per hour for those
who work as part-timers, it said, citing its own investigation.
The municipal labor authorities will investigate the matter,
Zhang Fengqi, deputy director of the provincial labor and social
security department, said yesterday.