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ONE HUNDRED FIRST CONGRESS
SECOND SESSION
MARCH 16 AND JUNE 8 1990
Printed for the use of the Committee on Government Operations
U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1990Committee on Government Operations
JOHN CONYERS, Jr., Michigan, Chairman
CARDISS, COLLINS, Illinois
GLENN ENGLISH, Oklahoma
HENRY A. WAXMAN, California
TED WEISS, New York
MIKE SYNAR, Oklahoma
STEPHEN L. NEAL, North Carolina
DOUG BARNARD, Jr., Georgia
BARNEY FRANK, Massachusetts
TOM LANTOS, California
ROBERT E. WISE Jr., West Virginia
BARBARA BOXER, California
MAJOR R. OWENS, New York
EDOLPHUS TOWNS, New York
JOHN M. SPRATT, South Carolina
BEN ERDREICH, Alabama
GERALD D. KLECZKA, Wisconsin
ALBERT G. BUSTAMANTE, Texas
MATTHEW G. MARTINEZ, California
NANCY PELOSI, California
DONALD M. PAYNE, New Jersey
JIM BATES, California
GARY A . CONDIT, California
FRANK HORTON, New York
WILLIAM F. CLINGER, Jr.,. Pennsylvania
AL McCANDLESS, California
HOWARD C. NIELSON, Utah
RICHARD K. ARMEY, Texas
DONALD E. "BUZ" LUKENS, Ohio
J. DENNIS HASTERT, Illinois
JON L. KYL, Arizona
CHRISTOPHER SHAYS, Connecticut
PETER SMITH, Vermont
STEVEN SCHIFF, New Mexico
CHUCK DOUGLAS, New Hampshire
C. CHRISTOPHER COX, California
CRAIG THOMAS, Wyoming
ILEANA ROS-LEHTINEN, Florida
JULIAN EPSTEIN, Staff Director
DONALD W. UPSON, Minority Staff Director
EMPLOYMENT AND HOUSING SUBCOMMITTEE
TOM LANTOS, California, Chairman
BARNEY FRANK
MATTHEW G. MARTINEZ
TED WEISS
ROBERT E. WISE
DONALD E. "BUZ" LUKENS, Ohio
JON L. KYL, Arizona
CHRISTOPHER SHAYS, Connecticut
EX OFFICIO
JOHN CONYERS, Jr., Michigan
FRANK HORTON, New York
STUART E. WEISBERG, Staff Director and Counsel
JOY SIMONSON, Professional Staff Member
ANDREA NELSON, Professional Staff Member
KAY KING, Professional Staff Member
JUNE LIVINGTSTON, Clerk
JEFF ALBRECHT, Minority Professional Staff
CONTENTS
... snip ...
Mr. LANTOS. Mr. Stein for McDonald's Corp.
STATEMENT OF STANLEY R. STEIN SENIOR VICE PRESIDENT, McDONALD'S CORP.
Mr. STEIN. I am Stan Stein, senior vice president of personnel and labor relations for McDonald's Corp. As such I am responsible for all personnel matters in the United States and 52 countries, involving a total of nearly 12,000 restaurants worldwide: 8,300 of those restaurants are here in the United States.
I am pleased to testify before you today on the policies and programs McDonald's has in place relative to the employment of young people. McDonald's is proud of its procedures and the safeguards it has in place which serve to assure that young people employed by our restaurants have a positive work experience that may benefit them in their later career pursuits, and that their employment meets all requirements of Federal and State laws.
We believe our compliance record is unequaled when putting context of the overall size and scope of the McDonald's restaurant system in the United States.
As indicated in my written statement, McDonald's Corp. has an exemplary record with regard to 14 and 15, year olds in its company operated restaurants. During my 16-year career, McDonald's Corp. has received violation notices from the Federal Department of Labor in only two restaurants. The investigation of those situations revealed that the violations occurred prior to McDonald's Corp. operating the restaurants in question.
I am pleased to say that to my knowledge, McDonald's Corp. has never, has never violated the child labor laws in the United States in any restaurant that it has operated.
With regard to our franchisees
Mr. LANTOS. Would you repeat that statement?
Mr. STEIN. Yes. sir. I am pleased to say that to my knowledge, McDonald's Corp. has never been cited for child labor violations in any restaurant it has operated. With regard to our franchisees, our review of the results of the enforcement activity through May 28 indicates that 20 franchise McDonald's owner-operated--
Mr. LANTOS. I am sorry to interrupt you, Mr. Stein, but I want to be sure that we get the record straight. I assume that you do not know of an episode that I will now bring to your attention.
Mr. STEIN. Please do, sir.
Mr. LANTOS. Because you are under oath, and I want to be certain that you testify accurately.
Mr. STEIN. Absolutely, and I certainly want to, sir.
Mr. LANTOS. The Chair has just been advised the State of Wisconsin Department of Labor on June 4 of this year, Monday of this week, cited a corporate-owned McDonald's in Milwaukee for 65 violations. Thirty-two children working beyond curfew, 27 working more than 8-hour days, 4 working more than 4O-hour weeks, working without permit and 1 working during school hours.
Are you aware of this?
Mr. STEIN. Yes, I am. That is not a Federal matter. That is State matter. But more importantly, those allegations, those allegations, we have a meeting coming up with the State within 2 weeks to review those allegations. Most of those allegations involve a work study program that the State, I believe, was not aware of.
So we are looking forward to the hearing or the meeting, I should say, within 2 weeks to discuss these things.
Mr. LANTOS. So what you are trying to do is to differentiate between violations of Federal law and violations of State law?
Mr. STEIN. That is correct.
Mr. LANTOS. So you admit to large numbers of State violations?
Mr. STEIN. No, sir, we do not.
Mr. LANTOS. How many do you admit to?
Mr. STEIN. I think there have been a few in our history. I cannot give you a precise number. This is the most extreme allegation I have ever heard concerning a McDonald's at the State level.
Mr. MARTINEZ. Mr. Chairman.
Mr. LANTOS. Congressman Martinez.
Mr. MARTINEZ. I don't know if it is relevant, but you made a statement that I think is being overlooked here. You said that there was a work study program in place in which these alleged violations took place that were not, that because of the work program, work study program, many of these allegations will not turn out to be allegations?
Mr. STEIN. That is correct, sir.
Mr. MARTINEZ. So, in other words, when they did the investigation, if they did an investigation, they were totally unaware of a work program. Who was conducting the work study program?
Mr. STEIN. The local school authorities, sir.
Mr. MARTINEZ. Under the school authority?
Mr. STEIN. That is correct.
Mr. MARTINEZ. If there were violations and they occurred within that program, there were actually more violations committed by the school than by McDonald's?
Mr. STEIN. I would hope—I don't believe there are violations. I think because of the authority granted by the work study program, these should not be violations.
Mr. MARTINEZ There are some strict labor laws concerning the number of hours that employees are able to work. If they worked in excess of those hours, whether it was a study program or not, that is a violation.
Mr. STEIN. I believe the Federal Government authorized in these work study programs for work during the school hours. A lot of the allegations deal with work during school hours which are part of the work study program.
Mr. MARTINEZ Excuse me. As I understood you, Mr. Chairman, one involved one working school hours. That one probably then, if it was, if the permission was given by the school, that probably is not a violation?
Mr. STEIN. That is correct. There are others dealing with an extensive program there. I can also tell you when the State was apprised of some of our facts in the matter, they immediately said they would have to reduce several of the violations, the alleged violations. They wanted to sit down and discuss the matter further.
This matter is at the investigatory stage right now. We received preliminary notice on the matter, as you indicated, Mr. Chairman, we are thoroughly investigating the matter. We have had preliminary conversations with the State. They are satisfied that the number of violations that were alleged are not correct. We are working our way through to see what in fact is correct and what is not correct.
Mr. MARTINEZ. Thank you. Thank you, Mr. Chairman.
Mr. LANTOS. We want you to proceed with your testimony. The subcommittee would like you to keep us informed of how this thing unfolds.
You do realise, Mr. Stein, that the State of Wisconsin has one of the finest reputations of any of the 50 States in terms of their Department of Labor and in terms of the State's enforcement of child labor laws. The Chair finds it difficult to understand that all 65 violations may in fact not have occurred.
It is conceivable that some of those will be reduced in number. But I must admit that in view of the fact that we have planned for this hearing for some time and this is a company owned store, it came as a very unpleasant surprise to the chairman that on Monday of this week, the week of the hearing, such a highly regarded Department of Labor as that of Wisconsin should cite a company owned store with such a large number of violations.
We will withhold judgment until the case works itself through, and look forward to your submitting the data to us.
Mr. STEIN. Sir, I agree with you, sir. With our exemplary record, though, before the Federal Department of Labor, we, too, are concerned about the allegations at the State level. We will certainly keep you informed.
Mr. LANTOS. Thank you very much. Congressman Martinez.
Mr. MARTINEZ. Since this is a situation that is under investigation and under negotiation, I doubt that we will visit this again. Since—if I might, with your permission?
Mr. LANTOS. Yes.
Mr. MARTINEZ. Ask a couple of questions.
Sixty-five sounds like a great number, if it is 65. If it is four people worked five times over the exceeding hours and each one of those is a violations by determination of the Department of Labor, then you really don't have the number that you think you have. It sounds so dramatic. I don't know if we have that information. Was it 65 different individuals?
Mr. LANTOS. That is correct.
Mr. MARTINEZ. Do you have any idea, Mr. Stein, how many people are employed at that particular station?
Mr. STEIN. Yes. there is. At any one restaurant there would be approximately 60 employees. Clearly there cannot be 65 different individuals. I would find that hard to believe, sir.
Mr. MARTINEZ. In other words, there is probably instances where there is maybe a different kind of a violation, more than one for each employee?
Mr. STEIN. It may be. As you said, Mr. Martinez, this matter is in the process of investigation. I have not gotten into all the details yet.
Mr. MARTINEZ. I understand that. We have brought it up here. So that there isn't—so that somebody doesn't develop a misconcept of what is really—I don't want to start painting a black brush on anybody before we know the facts.
Mr. STEIN. Especially in light, sir, of our record up until this point in time, which has absolutely been exemplary.
Mr. MARTINEZ. I want to make sure that even as we look at it here in this brief moment, that we are looking at it in a real perspective. You have 60 employees. There are 65 violations. There has to be a determination of several violations by one or more individuals. I doubt that all—of the 60 employees, how many are adults?
Mr. STEIN. I can't give you specific numbers as to that restaurant. In general, more than half would generally be adults.
Mr. MARTINEZ. There again it would be only 30 individuals at the most involved in the child labor laws which govern them, so that there couldn't be more than 30 individuals involved?
Mr. STEIN. That is correct.
Mr. MARTINEZ. Thirty-two. They say 32. So that then again, if there are 65 counts, you know that is more than one count per individual. So that many of these. like you say, may have been because of this particular program that you are talking about?
Mr. STEIN. That is correct.
Mr. LANTOS. I want to thank my colleague for his very helpful explanation.
According to the information the Chair has. there were 32 individual employees under the age of 18 who worked beyond curfew, among other violations.
Please proceed.
Mr. STEIN. Thank; you, sir.
With regard to our franchisees, a review of the results of the recent enforcement activity through May 28 indicates that 20 franchise McDonald's owner-operators, out of 2,162, were cited for violations. That is less than l percent of our total licensees with less than 1 percent of our restaurants.
Mr. LANTOS. Mr. Stein, I hate to keep interrupting you, but your testimony is so stimulating that I have to.
How many of your licensees were cited?
Mr. STEIN. There were approximately 20 franchised McDonald's owner-operators.
Mr. LANTOS. Out of?
Mr. STEIN. 2,162.
Mr. LANTOS. YOU Say that is less than 1 percent. That surely mathematically is less than 1 percent. My question is a different one. Were all 2,162 inspected?
Mr. STEIN. To my knowledge, no, sir.
Mr. LANTOS. How many were inspected?
Mr. STEIN. To my knowledge, hundreds of them have been inspected.
Mr. LANTOS. The 1 Percent figure then is an irrelevant figure, is it not?
Mr. STEIN. I can just state the facts, sir.
Mr. LANTOS. No, those are not the facts. The facts may be that of the ones inspected, maybe 10 percent were cited for violations. You made a statement, sir, which I find misleading. I am attempting to clarify what I consider to be a misleading statement.
Let me repeat.
Why don't you please read your prepared statement with respect to this item?
Mr. STEIN. OK. I go on from there, sir. I have completed it with regard to that item.
Mr. LANTOS. Then let me read it for you. What page is this statement on that you just made? Page 2. All right. Let me read it to you.
With regard to our franchisees. our review of the results of the enforcement activity through May 28 indicates that 20 franchised McDonald's owner-operators were cited for violations. That is less than 1 percent of our total licensees with less than 1 percent of our restaurants.
That is your prepared written statement submitted for the record; is that correct?
Mr. STEIN. And there is one additional statement——
Mr. LANTOS. No, I am just dealing with this paragraph now.
Mr. STEIN. Yes.
Mr. LANTOS. I am suggesting that this paragraph is misleading. This paragraph juxtaposes 20 violations with over 2,000 restaurants. And you draw the conclusion that is 1 percent. I am suggesting that that is misleading. It would be accurate if every single one of those 2,000 would have been examined and 20 would have been found in violation. Your testimony is you don't know how many were inspected.
Mr. STEIN. I know that several hundred have been, sir.
Mr. LANTOS. 500 or less?
Mr. STEIN. I would say less than 500.
Mr. LANTOS. 400? Don't you have a record? Don't they report to you when they are inspected?
Mr. STEIN. They do let us know. I don't have that immediately in front of me. I can provide that to you at a later time if you would like to have it.
Mr. LANTOS. You think it is less than 500?
Mr. STEIN. I believe that.
Mr. LANTOS. Do youbelieve it is less than 400?
Mr. STEIN. Yes, sir, I do.
Mr. LANTOS. Do you believe it is less than 300?
Mr. STEIN. I am not sure. I think it is somewhere between 200 and 300.
Mr. LANTOS. If it is somewhere between 200 and 300, instead of 1 percent, it may be as high as 10 percent. Isn't that true? You know, this is elementary. I mean, we are not debating it. If 200 were inspected and 20 were found in violation, then 10 percent were found in violation. Would you agree with that?
Mr. STEIN. Of those that were inspected, yes, sir.
Mr. LANTOS. Well, the ones that are cited are only ones that are inspected. The ones that are not inspected cannot be cited.
Mr. STEIN. That is correct.
Mr. LANTOS. So let's not play games.
Mr. STEIN. I am not trying to play games sir.
Mr. LANTOS. I am just trying to clarify what I consider misleading testimony. Allow me to do that. Then I will call on my colleagues to comment in whatever way they choose.
If there were 200 inspected and 20 were found in violation, then 10 percent were found in violation. Isn't that true.
Mr. STEIN. Yes. sir.
Mr. LANTOS. If 300 were inspected and 20 were found in violation, then that is somewhere in the neighborhood of 7 percent; isn't that correct?
Mr. STEIN. I believe the math works out, yes.
Mr. LANTOS. I think the math works out. The figure is somewhere between 7 and 10 percent, not 1 percent, would you agree with that?
Mr. STEIN. Of the ones that were inspected. yes, sir.
Mr. LANTOS. Let me go back again, because I am ready to play this until the cows come home.
Can your franchisees be cited without an inspection?
Mr. STEIN. No, sir, they cannot.
Mr. LANTOS. Therefore, for purposes of this dialog, we have to set aside the ones who were not inspected. Is that correct, sir?
Mr. STEIN. That is true, sir.
Mr. LANTOS. OK. Your statement is under oath that to the best of your recollection, and you will give me the accurate figure, between 200 and 300 were inspected?
Mr. STEIN. Yes, sir.
Mr. LANTOS. Therefore, only those 200 and 300 potentially could be cited? Are we in agreement?
Mr. STEIN. That is correct, sir.
Mr. LANTOS. Accepting your figure of 200 to 300, the violation therefore is not 1 percent, but it is from 7 to 10 percent? Do you agree with that?
Mr. STEIN. That is correct, sir.
Mr. LANTOS. Congressman Martinez.
Mr. MARTINEZ. Thank you, Mr. Chairman.
Never wishing to disagree with the chairman of our committee, just trying to understand where we are at and why we are there, first of all, let me ask one question. The enforcement activity is conducted by whom?
Mr. STEIN The Federal Department of Labor.
Mr. MARTINEZ. All right, Federal Department of Labor. I don't think we have a labor force to run out and investigate every—we investigate those that we can, I guess, on complaint or on a random sampling, to see what is happening. If it is on a random sampling to see what is happening, to make sure people are in compliance, then I can understand they would only do a certain number. As a result, you only have a certain number to evaluate any statement or statistic you make.
In that regard, then, when you say—and I am trying to read your statistics to see why the chairman feels that it is misleading or indicating a false premise here. When you say that, it indicates that in those inspections that were held, 20 franchised McDonald's owners were cited for violations. It doesn't say how many violations they were cited each one of them. It just says 20 franchises.
There is another avenue of argument if you want to try to determine approximately how many violations were. That is one sense complete. It indicates 20 franchise McDonald's owned were cited for violations. Then it says less than 1 percent of our total licensees with less than 1 percent of them.
Let me understand what you are saying in that second sentence is actually a fact?
Mr. STEIN. That is correct.
Mr. MARTINEZ. Without wanting to relate that to only the percentage that was—you are just simply stating that that is 1 percent of the total picture. You didn't say that all were investigated and all were you know, I am trying to do this for my clarification to understand what you are saying.
Mr. STEIN. That is absolutely correct, Mr. Martinez.
Mr. MARTINEZ. Then you say the majority of these violations were primarily hour related. I understand it very clearly in my mind that you are not trying to indicate there is only 1 percent of all, only 1 percent violations in all of your stores. You are simply stating that 1 percent of the total ?
Mr. STEIN. That is correct, sir.
Mr. MARTINEZ. I wish we would hare the ability to investigate every one. Then we could actually know for certain how many violations there were. Since we don't we can only extrapolate this out from those that were and come up with the conclusion the chairman has. If you had investigated all of them and extrapolate this percentage out, you would reach that percentage that he has suggested. Would that be fair?
Mr. STEIN. Sir. I don't know if it would be fair or not. You really have to ask the Department of Labor on what basis they investigated these particular restaurants verus others. It may have been because of some complaints or some other criteria that I am not privy to.
Mr. MARTINEZ. I am told that it was just random. You do a random sampling. You take a poll. Then you extrapolate that out as a percentage for everything as to what election outcome will be or whatever anything else might be by that poll, or what opinion of the people is. Then I take it that your statement is absolutely accurate if it was done randomly, and that is a sampling?
Mr. STEIN. That is correct, sir.
McDonald's believes that we have a special commitment to the young crew members employed in our restaurants. Furthermore, our experiences indicate that our future management will come from these ranks, as did the present management. Ed Rensi, president of McDonald's USA, began his McDonald's career as a crew members in Ohio; while Michael Quinlan, McDonald's chief executive officer, started at McDonald's as a part-time mail room clerk. Almost 40 percent of McDonald's corporate officers began as hourly restaurant employees. Up through the ranks success stories similar to these abound at every level throughout our company and within franchisee organisations and they do not sty at the top.
Our policy of hiring and promoting from within helps to ensure that those moving up through the ranks at McDonald's will hare learned strict operating procedures that have helped McDonald's succeed. Young people with desire, dedication, and ability can move up in our organisation, regardless of their educational, ethnic. or societal background. Work at McDonald's provides many noneconomic benefits as well. The only major study conducted on the subject of fast food employment was done in 1984 by the National Institute for Work and Learning, which interviewed 4,660 teenage employees from seven restaurant chains, including McDonald's. I have asked the institute, which is chaired by the distinguished former Secretary of Labor, William Wirtz, to provide the subcommittee with a copy of this study.
A look at the results of this study indicates that the majority of employees derived significant employability and personal skills, and were highly satisfied with their work experience. Occasional references to "hamburger flipping" jobs are not based on the reality of the learning and growth experience that employment at McDonald's provides to young people.
In an article in "Policy Review,' author Ben Wildavsky states, "Far from sticking its workers in an inescapable rut, McDonald's functions as a de facto job training program by teaching the basics of how to work." Called 'McJobs;" this article is subtitled "McDonald's—Inside America's Largest Youth Training Program."
McDonald's commitment to education. Much of the debate related to child labor concerns has been expressed in terms of the effects that youth employment has on educational achievement. I want to firmly state that McDonald's believes strongly in the importantance of education and has formulated a policy statement entitled "McDonald's Commitment to Education."
This philosophy emphasises the importance of communication between high schools, students, parents, and the McDonald's system and franchisees. It further emphasises the need for flexible scheduling and sensitivity to a working student's needs.
We are proud of what we are doing with and for working students today. We have examples. I think you are aware of our program such as McJobs for the handicapped. I would like to point out one program that I think you will find of significance.
In a pilot program in the State of Missouri, we have committed to the National Association of Secondary School Principals to pursue our working student's philosophy. This includes our goals to enhance communication between schools, students, parents, and the McDonald's franchisee. And, it further assures that we will provide sensible and flexible scheduling that ensures a balance between school and work in order to maintain or improve academic performance.
For all high school students employed by McDonald's, we will maintain ongoing programs recognising academic performance and school attendance. Our Missouri program is now being expanded to other regions of the country.
McDonald's began employment of 14 and 15 year olds on a very limited basis in our company operated restaurants only in the past few years. Prior to our employment of these youths, we first embarked upon a thorough research of all Federal and State laws. We then developed a step-by-step operational plan to provide restaurant management and franchisees with detailed guidelines designed to ensure compliance with these child labor regulations.
Under our present policies, employment of 14 and 15 year olds is recommended on a limited basis and only where we feel confident that a restaurant can manage the requirements of these special workers.
Before recruitment of 14 and 15 year olds begins in any particular geographic area, all pertinent regional and restaurant management personnel are thoroughly trained on the legal limitations of 14 and 15 year old employment, and the unique nature of employing these young workers. On a continuing basis, we analyze laws and regulations dealing with child labor and provide continuing detailed training on this subject. I want to stress that our employment program creates a "cushion" or buffer by imposing standards which exceed the requirements of existing law. I have submitted a chart showing this buffer. I will give you one short example so we can move on. The starting time under Federal law is that ~ 14 or 1.' year old cannot start prior to ~ a.m. Under our policy the, cannot start prior to T:;30 a.m. We put in a half-hour buffer.
We implement the following additional activities to ensure compliance with the law and a meaningful, employment experience for young workers:
Special identification, such as a different colored name tag for 14 and 15 year olds so management can readily recognise who they are.
Separate schedule, time card, and segregated personnel file.
Thorough orientation of all management personnel and accountability for compliance with the law.
Mr. LANTOS. How many 14 and is year olds do you employ? Mr. STEIN. We have approximately 1,700 in our company stores.
Mr. LANTOS. Thank you.
Mr. STEIN. Orientation and training of 14 and 15 year olds regarding "permissible and prohibited tasks" in the work place.
A letter which is correspondence sent to each parent outlining our educational commitment, and employment philosophy.
A detailed description of our step-by-step operational plan and our policy guidelines are attached as attachment C in your materials.
A recent article in the Chicago Tribune quoted an official of Department of Labor's Chicago office as saying:
"McDonald's Corp. has a reputation for strictly complying with the child labor law and enforcing child labor standards."
In summary, McDonald's believes that it has developed an appropriate balance between teen employment and family and educational responsibilities. Such a program ensures that teens are able to continue to contribute to their families' economic budget and gain valuable work experience, but not at the expense of academic achievement.
We further believe that our record of compliance with all applicable employment-related laws is outstanding, especially when taken in the context of managing such a large and unique multiemployer restaurant chain. We are proud of our compliance record in company operated restaurants and, overall, that of our franchises.
But, Mr. Chairman, we want to make it better. McDonald's pledges to continue to devote our efforts toward the goal of zero violations in franchised as well as company operated restaurants. Mr. LANTOS. Thank you very much, Mr. Stein. [The prepared statement of Mr. Stein follows:]
TESTIMONY OF Stanley R. Stein, Senior Vice President, Personnel/Labor Relations McDonald's Corporation, Oak Brook, Illinois Before the Subcommittee on Employment and Housing House Committee on Government Operations June 8, 1990
Mr. Chairman and members of the Subcommittee, my name is Stan Stein and I am Senior Vice President of Personnel and Labor Relations for McDonald's Corporation. As such, I am responsible for all personnel matters in the United States and 52 countries, involving a total of nearly 12,000 restaurants worldwide. I am also one of 20 officers who serve on a senior management team which determines policies and operational priorities for McDonald's worldwide restaurant system. I am pleased to testify before you today on the policies and programs McDonald's has in place relative to the employment of young people. McDonald's is proud of these procedures and the safeguards which serve to assure the young people employed by our restaurants have a positive work experience that may benefit them in their later career pursuits, and that their employment meets all requirements of federal and state laws.
To begin, I would like to briefly describe the McDonald's quick service restaurant system (company and franchised restaurants). In the United States, McDonald's now has approximately 8300 restaurants employing an average of 60 people, or a total employment of almost 500,000 employees. The majority of these employees, are part-time hourly crew employees.
Approximately one quarter, or 1,726, of McDonald's restaurants are owned and operated by McDonald's Corporation. The remaining 6,600 restaurants are operated by 2,162 individual independent owner operators under a license agreement with McDonald's Corporation. My testimony will address both the company-operated and franchised restaurants.
Mr Chairman, allow me to begin by stating that we believe that our compliance record is unequaled when put in the context of the overall size and scope of the McDonald's restaurant system in the United States. Our review of the reports of recent enforcement sweeps indicates that very few of our 1,726 company-operated restaurants received any violation notices.
With regard to our franchisees, our review of the results of the enforcement activity through May 28, indicates that 20 franchised McDonald's owner operators were cited for violations. That' s less than 1% of our total licensees with less than 11 of our restaurants. The majority of these violations were primarily hour related.
McDonald's Workforce
McDonald's Corporation employs approximately 100,000 people--4,200 corporate staff, 7,000 salaried restaurant managers and assistants, and approximately 85,000 hourly crew employees. Of these crew employees, approximately 1,700 are 14 or 15 years old. While our franchisees manage their own personnel practices and keep their own records, we estimate that they employ approximately 400,000 employees, about 350,000 of whom are paid on an hourly basis.
At McDonald's we manage the personnel function in two basic ways--by directing our company-operated restaurants to adhere to policies that we establish, and by providing McDonald's franchisees with information, training, programs and consultation to help them manage their personnel practices effectively. To accomplish these goals we employ approximately 200 personnel people who are located in our Home Office and in our 38 regional offices. They devote their full time to the personnel function.
McDonald's believes that we have a special commitment to the young crew members employed in our restaurants. Furthermore, our experiences indicate that our future management will come from these ranks, as did the present management. Ed Rensi, President of McDonald's USA, began his McDonald's career as a crew member in Ohio; while Michael Quinlan, McDonald's Chief Executive Officer. started at McDonald's as a pare-time mail room clerk. Almost 40 percent of McDonald corporate officers began as hourly restaurant employees. Up-through-the-ranks success stories similar to these abound at every level throughout our company and within franchisee organisation and they do not Stop at the top. Our policy of hiring and promoting from within helps to ensure that those moving up through the ranks at McDonald's will have learned strict operating procedures that have helped McDonald's succeed. Young people with desire, dedication and ability can move up in our organization, regardless of their educational, ethnic or societal background.
To help put the teenage component of our workforce in perspective, most young employees who work at McDonald's today are doing so because they need the income. Teenagers work to support themselves through schooling, or, for older youths, to gain a foothold in the labor market so they can move on to permanent employment, with McDonald's or elsewhere. Their work efforts are usually fully supported by their parents. The typical young worker at McDonald s today is not usually an upper middle class youngster looking to buy a second stereo, but is from a family which needs to augment its income with the earnings from part-time work.
Whether an employee chooses a career with McDonald's, or to work elsewhere, work at McDonald's provides many non-economic benefits, as well. The only major study conducted on the subject of fast food employment was done in 1984 by the National Institute for Work and Learning, which interviewed 4,660 teenage employees from seven restaurant chains, including McDonald's. I have asked the Institute, which is chaired by the distinguished former Secretary of Labor, William Wirtz, to provide the subcommittee with a copy of this study.
A look at the results of this study indicates that the majority of employees derived significant employability and personal skills, and were highly satisfied with their work experience. Occasional references to Hamburger flipping- jobs are not based on the reality of the learning and growth experience that employment at McDonald's provides to young people.
In an article in "Policy Review", author Ben Wildavsky states, "Far from sticking its workers in an inescapable rut, McDonald's functions as a defacto job training program by teaching the basics of how to work". Called McJobs, this article is subtitled "McDonald's" - Inside America's Largest Youth Training Program." A copy of this article is attached (Attachment A).
McDonald's Commitment to Education
Much of the debate related to child labor concerns has been expressed in terms of the effects that youth employment has on educational achievement. I want to firmly state that McDonald's believes strongly in the importance of education and has formulated a policy statement entitled "McDonald's Commitment to Education." This philosophy emphasises the importance of communication between high schools, students, parents and the McDonald's system and franchisees. It further emphasises the need for flexible scheduling and sensitivity to a working student's needs. I have attached this statement to my testimony (Attachment B). In addition, we have developed a video "Work and the American Student", which further outlines our commitment to education and our goal of communicating with educators to develop strong walking relationships on work/education issues. I would be pleased to provide a copy of this videotape to the subcommittee.
We're proud of what we're doing with and for working students today. In a pilot program in the state of Missouri, we have committed to the National Association of Secondary School Principals to pursue our working student's philosophy. This includes our goals to enhance communication between schools, students, parents and the McDonald's franchisee. And, it further assures that we will provide sensible and flexible scheduling that ensures a balance between school and work in order to maintain or improve academic performance. For all high school students employed by McDonald's, we will maintain ongoing programs recognising academic performance and school attendance. Our Missouri program is now being expanded to other regions of the country.
McDonald's Policies and Procedures for 14 and 15 year old Employment
McDonald's began employment of 14 and 15 year olds on a very limited basis in our company operated restaurants only in the past few years. Prior to our employment of these youths, we first embarked upon a thorough research of all federal and state laws. We then developed a step-by-step operational plan to provide restaurant management and franchisees with detailed guidelines designed to ensure compliance with these child labor regulations. Under our present policies, employment of 14 and 15 year olds is recommended on a limited basis and only where we feel confident that a restaurant can manage the requirements of these special workers.
Before recruitment of 14 and 15 year olds begins in any particular geographic region, all pertinent regional and restaurant management personnel are thoroughly trained on the legal limitations of 14 and 15 year old employment, and the unique nature of employing these young workers. On a continuing basis, we analyse laws and regulations dealing with child labor and provide detailed training on this subject.
I want to stress that our employment program creates a "cushion" or buffer by imposing standards which exceed the requirements of existing law. The following chart clearly demonstrates this point;
Federal Law McDonald's Policy on 14 and 15 Year Olds
Start time - 7:00 a.m. Start time - 7:30 a.m.
End Time - 7:00 p.m. End time - 6:45 p.m.
Hours per week - 18 Hours per week - 16
Hours per school day - Hours per school day - 2.5
Weekend work per day - Weekend work per day - 7.5
We also implement the following additional activities to ensure compliance with the law and a meaningful employment experience for young workers:
*Special identification, such as a different colored name tag for 14 and 15 year olds so management can readily recognize who they are.
*Separate schedule, time card and segregated personnel file.
*Thorough orientation of all management personnel and accountability for compliance with the law.
*Thorough orientation and training of 14 and 15 year olds regarding "permissible and prohibited tasks" in the work place.
*A letter which is correspondence sent to each parent outlining our educational commitment, and employment philosophy.
A detailed description of our step-by-step operational plan and our policy guidelines are attached (Attachment C)
In addition to taking the above actions in Company-operated restaurants, there materials and policies redistributed to our franchisees, who are urged to adopt then, and are backed up with field support. I would note, however, that McDonald's franchisees are free to establish their own labor practices, within the structure of the law, just as they are free to manage other aspects of their business. we --believe these efforts have worked.
A recent article in The Chicano Tribune quoted an official of Department Of Labor's Chicago office as saying: "McDonald's Corporation has a reputation for strictly complying with the child labor law and enforcing child labor standards".
CONCLUSION
In summary, McDonald's believes that it has developed an appropriate balance between teen employment and family and educational responsibilities. Such a program ensures that teens are able to continue to contribute to their families' economic budget and gain valuable work experience, but not at the expense of academic achievement.
We further believe that our record of compliance with all applicable employment-related laws is outstanding, especially when taken in the context of managing such a large and unique multi-owner restaurant chain. We're proud of our compliance record in company operated restaurants and, overall, that of our franchised restaurants. But, Mr. Chairman, we want to make it better. McDonald's pledges to continue to devote our efforts toward the goal of zero violations in franchised as well an company operated restaurants.
| session dates: |
March 16, June 8, 1990
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