Friday, November 20, 2015

Bigger Than Ecuador, McDonalds Corp. Investigated by US Justice Department

A little known federal law has resulted in the world’s largest restaurant chain, McDonalds Corp, into having to sign a settlement agreement with the US Justice Department on November 19, 2015. This concludes an investigation into unfair documentary practices by the company going back several years, but it is not the end of the road just yet.

The headlines this morning all boasted the $355,000 civil fine levied against McDonalds, but this is a company with an economy of its own larger than the country of Ecuador! Instead, the real problem at McDonalds right now is the consequences and unforeseen costs of complying with the settlement as well as federal law.

So what was all this about anyway? Why would an organization with vast resources and layers of compliance officers end up in the cross hairs of the Justice Department for something as asking workers who were permanent residents to produce updated documents? For many folks this may seem like the logical thing to do, but assuming or being creative about federal law does not sit well with federal investigators.

Federal Law says that two parties are exempt from having their employment re-verified, American Citizens and Permanent Residents. This is the one group who will ultimately benefit from immigration law as legal residents who belong in this country and they are not to be asked for additional documentation after having already done so. Even the compliance layers at McDonalds could not protect against this violation and it will now cost them well past the civil fine.

The problem perhaps is the constant change to employment verification laws over the past 30 years and American voters are still not satisfied enough is being done. Employers are slow to realize the serious consequences and the very specific details that come into play for verifying employment eligibility. No longer can these regulations be overlooked or corporate practices assumed to be up to date, it is the responsibility of all American employers and the Justice Department is only increasing resources to ensure this.

As this week concludes and the headlines begin to fade away, the rest of the settlement agreement only brings to light the upcoming troubles still in store for McDonalds Corp. Those details include such things as having to produce documentation and regular reports for the Justice Department’s Office of Special Counsel. Additionally, the company will have to pay for training for all Human Resources Consultants and General Managers.

Five regularly scheduled trainings per month will be attended with the company having to detail and report the attendance records before sending them to the government. Back pay will be offered to workers identified as having been affected by these practices and this even includes people who were terminated. Additionally, the settlement doesn’t bar further suits or investigations into the company and it also specifically opens the company’s documentation and practices to regular review and scrutiny.

McDonalds, with annual hiring of over a million workers, has just found itself a babysitter for the next two years and that problem is far worse than the $355,000 fine.

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