McDonald’s Canada allegedly forced temporary workers to rent housing at inflated prices, underscoring the complexities and problems that can arise when firms cut costs by hiring low-paid foreign workers recruited through employment agencies.
The case was reported by Canadian broadcaster CBC on Thursday and involves five temporary workers from Belize who were recruited through Actyl Group, which operates a website directed at that country's job seekers. The workers claim that McDonald's deducted 280 Canadian dollars ($254) from each of their biweekly paychecks, totaling 3,030 Canadian dollars a month. The CBC said it reviewed the apartment's rental contract, and it said the employment agency confirmed that it was the signatory that agreed to pay 2,359 Canadian dollars in monthly rent. It did not pay for any utilities.
“To say you are living in company quarters and we are going to deduct your rent, and if you dare say you don’t like where we put you, we’re going to charge you anyway ... that seems like indentured labor to me,” Jinny Sims, MP and opposition critic for employment and social development, told CBC in a report published Thursday.
While McDonald’s Canada confirmed the rental arrangement's terms, it rejected other allegations, including the charge that worker's were promised but not offered overtime. The workers told the CBC that the promise of overtime was instrumental in their decision to take the jobs.
The Canadian subsidiary of Oak Brook, Ill.-based McDonald's Corp. said Monday that it was “aware of serious allegations concerning the employment of temporary foreign workers at two independent franchisee operations located in British Columbia and another in Alberta,” and that it doesn't tolerate infractions. The company says it employs about 3,400 temporary guest workers in Canada.
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Canada is investigating alleged labor violations of its Temporary Foreign Worker Program. The CBC earlier reported that McDonald’s franchise owners in Alberta and British Columbia cut hours for Canadian employees while favoring Filipino guest workers for overtime pay. The CBC also alleged the owners housed expatriate workers in cramped living conditions and deducted rent from their paychecks.
Low-skilled guest workers come from impoverished areas and often borrow money to cover expenses involved in working abroad and send wages back home to their families. They’re often housed in crowded quarters and work under conditions that would require them to leave the country quickly if they’re fired or laid off.
Critics say that laws that allow low-wage workers into the country are in effect subsidizing corporations' labor costs with cheaper foreign workers, which results in lower wages as the immigrants have less job mobility and are unlikely to complain about unfair or illegal labor practices for fear of being forced to leave the country.