Inquiry into KFC wages widens

(Reuters)
Updated: 2007-04-02 09:32

Related: McDonald's, KFC under fire for labor rights violations

Chinese authorities have increased pressure on McDonald's, KFC and Pizza Hut, with the official trade union threatening legal action against the fast-food giants if they are found to have underpaid workers.

The restaurant chains' employment practices came under investigation in the southern city of Guangzhou last week when a local newspaper reported they had been paying many part-time workers from 4 to 5 yuan an hour despite a legal minimum hourly wage of 7.5 yuan ($0.97) set by the city this year.

McDonald's and Yum Brands Inc., owner of the KFC and Pizza Hut chains, have both denied wrongdoing and said they follow China's labour regulations.

Government checks into possible underpayment by the fast-food chains have expanded across southern China's Guangdong province, whose capital is Guangzhou, the People's Daily Web site (www.people.com.cn) reported on Monday.

The Beijing News reported that similar issues with part-timers' wages may exist in at least 10 Chinese cities, including Beijing and Shanghai.

China's state-run trade union said it would support court action if the fast-food companies did not mend any wrong-doing.

"If there really are unlawful employment practices and they refuse to correct their mistakes, the union will complain to labour inspection agencies and demand investigation and punishment according to the law, and even support workers suing in court," Li Shouzhen of the All-China Federation of Trade Unions said on Chinese television, according to Guangzhou's New Express newspaper, which first reported the claims.

Millions of Chinese workers toil in dangerous, low-paid jobs with little protection. As the country's economy has grown, the government has been seeking to lift incomes in a bid to boost consumer spending.

"Within the People's Republic of China, there are no privileged businesses," said Li.

McDonald's has some 50,000 employees in the Chinese mainland and aims to add 100 restaurants a year to its current stable of over 790 restaurants in the country. 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 in the country.

Many of the part-time workers are college and university students trying to help pay for their education.

China's trade unions and labour departments would carry out a nationwide check of wages to ensure minimum wage rules are being followed, union official Li said.



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