As the Canadian government begins an investigation into alleged labor violations involving temporary guest workers at McDonald’s Corporation (NYSE:MCD) franchises in Alberta and British Columbia, McDonald’s Canada said on Monday that it’s launching an internal review of its hiring practices across its entire Canadian network. Labor and migrant rights activists are concerned that possible abuses of foreign temp worker programs, such as Canada's, could eventually have far-reaching negative effects on employee wages and training opportunities throughout the world.  

The country’s Temporary Foreign Worker Program, as it is officially known, allows employers to hire foreign workers where there is a “demonstrable shortage of Canadian citizens and permanent residents” to do the job. But Canada’s guest worker system is under the microscope over its recruitment of foreign workers for low-skilled jobs, such as bagging burgers or cleaning hotel rooms, even as youth unemployment in Canada stands at almost 14 percent. Employers claim there simply aren’t enough Canadians to do these jobs.

“We have launched a comprehensive review of all corporate and franchise-operated restaurants across the country to ensure our operations are fully aligned with the requirements of the Temporary Foreign Worker Program and consistent with our McDonald’s Values,” McDonald’s Canada said Monday. “The Temporary Foreign Worker Program was created to help employers resolve staffing issues, and it provides important support for businesses when used as intended.”

The government recently launched an investigation into the hiring practices of both corporate-owned and franchise-operated McDonald’s outlets after employees of two separately owned franchises complained earlier this month that locals were being pushed out in favor of short-term, foreign guest workers. The local Canadian workers claimed the guest workers received more hours than they did, and that their hours and pay were cut as a result.

Christian Morrow, a 54-year-old assistant restaurant manager who has worked at a Parksville, B.C., McDonald’s franchise for 24 years, told the CBC she was let go from her job because her boss said the guest workers, mostly Filipinos, were better workers.

“What is often called a better work ethic is really them [the guest workers] working under a fear ethic,” Dennis Gruending of the Ottawa-based Canadian Labour Congress, said.

He pointed to three reasons why guest workers tend to do more work for less money: First, guest workers often pay recruitment fees for the privilege of working in a developed country like Canada, and they often accumulate debt in the process. Second, guest workers can't easily change jobs, and in most cases, they have to leave the country if they get fired or let go. Third, employers can use guest workers to fill their entry-level positions regardless of the guest worker's skill level, which can prevent local workers from obtaining foot-in-the-door positions, thus keeping payroll expenses down. This is usually done, Gruending said, by using a pool of foreign temps who are less likely to ask for raises or complain about working conditions than domestic workers.

In Alberta, franchise operator Dan Brown was accused by his former Canadian restaurant manager, Chris Eldridge, of housing foreign temps in cramped living conditions and deducting $400 a month for rent. Brown has denied any wrongdoing and confirmed to the CBC that he employs 90 foreign temps who work full-time. He said he pays part-time employees less than full-timers, but he insists all full-timer workers are paid equally.

Migrant rights advocates don’t necessarily want to see the program scotched, and labor economists routinely say such guest-worker programs are necessary to fill small pockets of demand where there aren’t enough locals to meet demand, which can happen in more sparsely populated areas.

Chris Ramsaroop, an organizer for Toronto-based migrant rights organization Justicia for Migrant Workers, said employers use the “stereotype” of the hard-working migrant laborer to justify what they really want, which is to pay foreign workers less than domestic workers and have a revolving door of employees kept bonded to them under threat of deportation.

“The reason why employers like to use those stereotypes is that they simply want to deny people rights,” he said.

Migrant rights advocates and labor advocates both say that if Canada truly has a shortage of burger flippers, hotel housekeepers, or other lesser-skilled, low wage workers, then it should give workers a path to citizenship and labor rights equal to their domestic counterparts.  

“From pickers to pipe-fitters and burger-flippers, Canadian businesses have become hopelessly hooked on short-term foreign workers,” the Toronto Globe & Mail said in its Sunday editorial. “The program has become a crutch for too many employers – an excuse to pay lower wages, or avoid the cost and effort of training."