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Fast Food Chains Defend Against Exploitation Claims
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A south China labor watchdog is expected to announce by April 3 the results of a probe into the part-time employment policies of US fast food chains KFC, McDonald's, and Pizza Hut.

The investigation by Guangdong Provincial Labor and Social Security Department follows an exposé by a local newspaper that alleges the chains are underpaying and overworking their part-time staff.

Meanwhile, the operators of the fast-food giants have moved to defend their employment practices, saying the labor laws are unclear.

Peng Xurong, an official with the labor department, said the chains could face fines of up to 10,000 yuan (US$1,293) and ordered to pay backdated compensation to part-timers if they are found to be breaking labor laws.

The New Express newspaper ran a report earlier this week saying McDonald's paid 5.3 yuan (68 US cents) an hour to part-time staff, KFC 5.6 yuan (72 US cents) and Pizza Hut 5.4 yuan (70 US cents) including subsidies.

Guangzhou's minimum hourly pay is 7.5 yuan (97 US cents) for part timers, according to regulations in effect since the start of the year.

The regulations define part-time workers as those who work less than five hours a day for the same employer.

About 80 percent of employees at McDonald's and KFC restaurants were paid by the hour and most had no contracts, according to the newspaper.

In an undercover investigation, New Express found at least eight student workers had worked more than five hours a day in a KFC restaurant in Haizhu District in January.

"We are employed and paid as part-time workers, but actually we work full-time," the report quoted an unnamed part-timer at a Guangzhou Mcdonald's restaurant as saying.

But Yum Restaurant China, the parent company of KFC and Pizza Hut, said in an announcement that the company has always strictly abided by Chinese laws and regulations.

Cui Huanming, a marketing manager of KFC in Guangdong, argued the chain employed mostly students and offered good opportunities to gain "social experience."

Cui said the regulations were unclear on the definition of part-time workers and failed to say whether students should be included.

Guangzhou fast-food chains were not alone in allegedly underpaying part-timers. McDonald's and KFC pay 6.8 yuan an hour in Beijing, less than the statutory minimum hourly wage of 7.9 yuan.

George Gu, a spokesman with McDonald's public relations department in its Shanghai headquarters, said the company was in talks with Guangdong provincial labor department to clarify their staff source and employment systems.

"As a responsible employer, we have been in line with Chinese laws and regulations issued by the government and our payment standard is in line with related rules in the country," the company said in a statement emailed to Xinhua.

Gu said the company would only adjust payments if the labor authorities ordered it to do so.

McDonald's has more than 790 restaurants and 50,000 employees on the Chinese mainland and aims to open 100 new restaurants a year.

Yum Brands, whose 2,000 KFC, Pizza Hut and Chinese-style East Dawning restaurants in China generate nearly a third of its global operating profit, has more than 100,000 staff.

(Xinhua News Agency March 30, 2007)

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