The pinch is not everyone who was underpaid will be reimbursed.
This is something Unite union national secretary John Crocker took issue with.
People might not be paid if the franchisee owner they worked for had closed their company.
The McDonald’s spokesman explained a few franchisees wound up their operations before 2015/16 when the Ministry of Business, Innovation and Employment (MBIE) started raising concerns over errors in interpreting the Holidays Act.
Another few decided to opt out of the collective remediation process. It would be up to the regulator, MBIE, to deal with them.
An MBIE spokesperson recognised a small proportion of McDonald’s franchisees weren’t yet ready to pay those owed money.
“It is important that they do not hold up the majority [of franchisees] that are ready, so that as many employees as possible can receive their payments now,” the MBIE spokesperson said.
The McDonald’s spokesman said anyone who believed they may be owed money by a business excluded from the remediation should contact MBIE.
Current/former McDonald’s staff left out of the remediation took to TikTok to complain.
“Our old franchisee is refusing to pay lol fml,” one user of the social media platform said.
“Get a lawyer,” another person responded.
Meanwhile on Reddit, current/former staff discussed how much they received.
“Wife got $1200 I got $3000, nice little surprise,” one user said.
Another person commented, “$400 from one franchise, $0 from another franchise. One former manager of mine was owed over $10,000... That’s A LOT of underpayment.”
Payouts will differ depending on the length of employment, the variability of hours worked, and the variability of pay rates.
Once a current/former employee and the McDonald’s owner agree on a reimbursement value, the payment will be made within a month.
“The project has been one of the most complex remediations undertaken and completed to date,” the McDonald’s spokesman said.
“McDonald’s worked with MBIE, current and former franchisees, and third party experts, spending millions of dollars and tens of thousands of hours to get to the point where we can commence the remediation payments.”
MBIE has been governing the process of reimbursing people underpaid due to misinterpretations of the Holidays Act.
Accordingly, it worked with McDonald’s to agree on formulas to calculate how much people are owed.
Crocker said MBIE had identified 200 of the country’s largest employers that had made mistakes under the Holidays Act.
He feared there would likely be numerous smaller employers unaware of their mistakes.
Crocker characterised the Holidays Act as being written in a way that made fulfilling remuneration obligations hard to “systemise”.
Workplace Relations Minister Brooke van Velden is drafting a bill to update the legislation, which MBIE is expected to release for targeted (rather than public) consultation next month.
Van Velden said the exposure draft would change the way annual leave is provided, moving from an entitlement system to an accrual system.
“While workers might not notice any change in their entitlements, from a payroll perspective this should make a huge difference,” she said.
“An accrual system should help avoid the complex calculations that regularly stump payroll software and should therefore reduce compliance costs for employers.”
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
