A former McDonald's franchisee in Pennsylvania violated federal minimum wage and overtime laws and has agreed to pay more than $200,000 in back pay to nearly 300 employees, the Department of Labor said.
The employees – who worked at the company's six locations across central Pennsylvania – included 178 foreign student workers.
Headed by Andrew Cheung and based in Middletown, Pa., "Cheung Enterprises not only failed to properly pay its employees, it willfully took advantage of vulnerable student workers living and working in our country under the J-1 visa program," said Al Gristina, director of the division's Wilkes-Barre District Office, which conducted the investigation.
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Specifically, investigators found Cheung Enterprises made improper deductions from employee paychecks, bringing the rate of pay for some employees below the federal minimum wage of $7.25 per hour.
Other employees did not receive the overtime premium required under the law.
Investigators also determined that the company charged the student workers excessive rent that was deducted from their paychecks for substandard, employer-owned housing.
Saket Soni, the executive director of the National Guestworker Alliance, welcomed the news.
"Brave student guestworkers from Argentina, Malaysia, and other countries defied threats of retaliation and went on strike to end the severe exploitation they faced at McDonald's stores last year, including sub-minimum wage pay, unpaid overtime, and overpriced company housing," Soni said. "By protecting the right to organize for the most vulnerable workers, we help raise the floor for every worker in the U.S."
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