McDonald’s Wage Dispute: Company Pays $26 Million To Settle 7-Year-Old Lawsuit

Bringing an end to a nearly 7-year-old lawsuit, McDonald’s will pay out $26 million to settle a wage dispute brought about by employees from California. The dispute stemmed from numerous issues at corporate-owned locations, including a timekeeping program that cut overtime pay, policies that required workers to maintain uniforms with their own money and a lack of breaks during certain shifts.

The suit involved claims from roughly 38,000 staff members and represented the largest wage settlement ever made by the fast-food giant. In addition to paying back plaintiffs for overtime, the settlement will mandate a number of changes at the locations, including an electronic time tracking system, mandatory breaks, and replacement uniforms.

Despite settling, the company did concede to wrongdoing.

“While we continue to believe our employment practices comply with the California Labor Code, we have decided to resolve this lawsuit,” the company said in a statement. “We take our responsibility as an employer seriously and are deeply committed to the fair treatment of all of our employees.”

The suit was initially brought against the company in 2009 by Maria Sanchez and several other California employees. Among their complaints was that McDonald's had violated state law by not paying overtime for employees who worked more than eight hours in a 24-hour time period.

This settlement comes not long after employees from Michigan locations teamed with the American Civil Liberties Union to sue McDonald’s for not adequately addressing the problem of sexual harassment at its locations. Workers in Chicago have also recently sued the company for a redesign that made workers more vulnerable to assault from abusive customers.