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5 April, 2007 Wage Probe Highlights Discrete Rules |
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Authorities in the southern city of Guangzhou say they soon will conclude an investigation into employee-pay practices at Yum Brands Inc. and McDonald's Corp., in a case that highlights the ambiguities of China's thicket of overlapping and sometimes confusing labor regulations.
The issue also illustrates the challenges for big multinationals created by an increasingly aggressive local media.
Officials in Guangzhou began reviewing the treatment of workers at McDonald's and Yum's KFC and Pizza Hut outlets after a local newspaper, which placed reporters undercover in the restaurants, said student employees were being paid less than the city's minimum hourly wage of 7.50 yuan (97 U.S. cents).
Under China's national labor law, students aren't covered by minimum-wage requirements and other rules, as they aren't considered part of the formal work force and--in theory--get social security and insurance benefits through their schools and universities.
An official of China's Ministry of Labor and Social Security said provincial and city governments can impose their own regulations as long as they don't conflict with national law.
Local governments in China frequently impose regulations that are different from one another and from those stipulated by the central authorities, causing headaches for companies doing business across the country. Advertising, public-health and other types of rules vary widely from place to place.
Shanghai's labor authorities, for instance, say that as far as they are concerned, minimum-wage laws don't apply to part-time student workers. Chinese businesses routinely pay below minimum wage for students--and often for regular workers, too.
Executives at multinationals in China often say they believe local media unfairly single their companies out for critical coverage.
Some Internet users questioned the focus on McDonald's and Yum. "There are a lot more [employers] paying even less," said one post. The Legal Evening News in Beijing wrote that it is an "embarrassing fact" that many people prefer to work for foreign fast-food restaurants as they are at least guaranteed receiving their wages on time. Others attacked the multinationals for taking advantage of local workers. "Doing business on Chinese soil you must obey Chinese game rules, you must do business legally, otherwise you will get punished," wrote one man who left a post on the Web site of China's state-run news agency.
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