McDonald’s workers overpaid more than $18,000 in vacation pay

photo: JOAN CROS / NurPhoto courtesy AFP

A former McDonald’s employee was shocked to discover that the company calculated that she was overpaid by more than $18,000 in vacation pay.

Fast-food companies are paying holiday pay For tens of thousands of employees Their equity was miscalculated.

In November 2019, the Unite union announced it had reached an agreement with McDonald’s to return losses to employees caused by payroll errors 10 years ago.

McDonald’s is one of hundreds of companies affected by an error in its payroll system calculating vacation pay.

The union’s national secretary John Crocker told RNZ this week some staff had also had their wages reduced because they were overpaid.

“We urge all current and former McDonald’s employees to contact McDonald’s in writing and ‘withdraw your consent to the deductions’ and tell them you want to know the full figure of the underpayment,” Kroc said in a statement.

One woman said it was a very dramatic experience for her.

She received a statement saying she was underpaid $3,600 but overpaid more than $18,000.

She said she was told the money was accumulated over about 12 years of working at various McDonald’s outlets owned by the same company.

“I had a good relationship with my previous employer. I am confused by this. McDonald’s has not contacted me about this yet but will receive an email soon.”

She said she didn’t think she had much free time in terms of work, but the information was not transparent or easy to understand.

“None of this makes any sense.”

She said the information on the website did not match the statement she received or what her former employer told her in an email. “It’s so confusing. I need someone to tell me I don’t have to pay this. I have vacation time and I’m paid for vacation time and I don’t understand how I could have been overpaid.”

A McDonald’s spokesman said employees who were overpaid do not have to pay it back.

“MBIE approved an ‘offset’ approach because people often have underpayments and overpayments when recalculating payments for the remediation period. If the net effect is that someone is overpaid, we do not expect them to repay anything to their employer. The only benefit of the remediation is to the employee. Also, it is important to note that if they were overpaid, they had already received that money from the payment at the time…anyone who was overpaid will not receive a bill/claim from the franchisee who employed them.”

Jim Roberts, partner at law firm Hesketh Henry, said some parts of the law were difficult to understand, but a fundamental problem for many large employers was the way their payroll providers calculated holiday.

“Every system I’ve come across has been calculating vacations by the hour…but this bill provides for vacations to be calculated in weeks.

“If someone’s salary and hours don’t change, then in most cases you won’t have a problem, but if there is a permanent, temporary or variable change in their hours, or if your salary changes, then the software will immediately have issues.”

It may also happen that the time allocated may be correct, but the compensation allocated for that time may be wrong.

He said the problem could be exacerbated because if holiday pay was paid incorrectly, every holiday in the next 12 months could be calculated based on the incorrect holiday assessment.

He said McDonald’s was one of those places where it was more difficult to work. “Very few people can plan their workweek perfectly… most employees work in shifts, so it’s unlikely that their workweek can be perfectly structured.”

The government is working to simplify the law.