McDonalds to Pay $26 Million to Underpaid Workers in California

On Monday, McDonald’s announced that it will be paying $26 million in a settlement with 38,000 current and former workers in California.

McDonald’s has had the class-action lawsuit sitting in various courts in California since early 2013. Claims by the 38,000 workers in the lawsuit include unpaid overtime, not paying the state minimum wage, not giving giving breaks to employees, and not paying employees back for company required services such as uniform cleaning.

As a result, McDonald’s, in addition to paying $26 million, will now electronically track employee pay, provide new work uniforms for free, and institute breaks during shifts.

The settlement is the largest wage-related settlement for the fast food giant in the United States, and despite paying, McDonald’s has maintained that there was no wrongdoing.

“While we continue to believe our employment practices comply with the California Labor Code, we have decided to resolve this lawsuit filed back in early 2013,” said McDonald’s in a statement. “With this settlement, the parties have reached a mutually acceptable resolution and have submitted the settlement to the Court for its review and approval.”

While the lawsuit is most likely over now, the case itself may be influential in future rulings.

“Everyone knows you can sue McDonald’s, especially after that woman scalded herself on coffee that McDonald’s kept too hot years ago,” say Jay Beringer, a consultant who works with restaurants in the Western United States. “In California, this case is going to be a big push for people who are demanding that the state minimum wage hits $15 an hour before 2023. This was made into law years ago that the minimum wage goes up in steps, but because of the housing market and increased inflation, many are demanding that now.”

“It’s also going to be the set price for similar future lawsuits in California. McDonald’s isn’t the only company out there that have had accusations against them on similar things. So future cases will use this almost like precedent.”

“And finally there’s the political part. Whoever is siding with the worker on this will be smart to point this case out in speeches, perhaps even use it to put more worker rights laws on the books. Cases in California have done that before, and $26 million is a number hard to ignore for corporations, voters, and politicians alike.”

“To most people this is simply a settlement over some wrongdoing, but this will most likely have some far reaching implications in the next five to ten years.”

Workers, on average, will be receiving between $400 and $500 after lawyer fees are deducted. The settlement will be going before a Los Angeles County Superior Court judge for final approval in the next several weeks.