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Fri, Mar 30, 2007 - Page 10 News List

PRC probes restaurants for pay violations

`RESPONSIBLE EMPLOYER' McDonald's, Pizza Hut and KFC are accused of paying as much as 40 percent less than the minimum wage to employees in Guangdong

AP AND BLOOMBERG , SHANGHAI

Customers walk in to a KFC restaurant yesterday in Shanghai.

PHOTO: AP

Labor officials in Guangdong Province, China, said yesterday they are investigating reports that fast-food chains like McDonald's and KFC pay their part-time workers less than the minimum wage of about US$1 an hour.

McDonald's and Yum Brands Inc spokesmen in China responded by saying their companies abided by the law but were seeking clarification about regulations for part-time workers, especially for students.

The claims first surfaced in a report by the local newspaper New Express Daily, which said its reporters, posing as job applicants, found that McDonald's, KFC and Pizza Hut were paying part-time staff as much as 40 percent less than the minimum wage for Guangdong.

Minimum wages vary from region to region in China. The minimum wage for Guangdong Province is 7.5 yuan (US$0.97) per hour.

The New Express Daily report said McDonald's was paying part-timers only 4 yuan per hour. It said part-timers at KFC earned 4.7 yuan and Pizza Hut 5 yuan per hour.

Neither McDonald's nor Yum, which operates both KFC and Pizza Hut, responded directly to the allegations regarding their wage rates.

But McDonald's issued a statement yesterday saying that staff from its unit McDonald's Guangdong Co were meeting with local labor officials to "clarify our crew source and employee systems now."

"We commit ourselves to providing employees with equal work opportunity, aspiring and safe working environment and full range of career development," the McDonald's statement said.

"As a fully responsible employer, we always follow the relevant government laws and rules. We offer our employees wages which meets the country's relevant standards," it said.

Yum Brands issued a statement saying the allegations resulted from confusion over whether the laws pertaining to part-time workers included students, who according to the New Express Daily constitute 70 percent of part-time staff in such fast-food outlets.

"This was caused by a newly introduced regulation. We are working with the government to seek clarification of these laws," it said. "Yum has always strictly adhered to Chinese laws and regulations."

International companies in China are increasingly being publicly criticized over ethnical issues.

Wal-Mart Stores Inc, the world's largest retailer, last year allowed employees in China to unionize following criticism that the company exploited lax employee protection in the country to keep costs low.

All-China Federation of Trade Unions, a Chinese labor group, wants unions in 70 percent of foreign-funded businesses by the end of the year, from 60 percent last year, the official China Daily reported on Jan. 5.

Taiwanese Hon Hai Precision Industry Co (鴻海精密), a maker of iPods for Apple Inc, last June was accused by a newspaper for forcing workers to work long hours for low pay and Starbucks Corp has been under criticism for opening a store in Beijing's Forbidden City, a move considered by some as an insult to Chinese civilization.

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