China’s young labor and minimum wage laws don’t apply to student workers, a fact that helped McDonald’s and Yum! Brands escape legally unscathed from charges that they underpaid workers in Guangzhou.
The controversy in the southern city emerged after reporters from local newspaper Kuai Xin Bao working undercover in McDonald’s and Yum! Brands restaurants (the company owns the KFC and Pizza Hut chains), found part-time employees were being paid up to 40% less than Guangzhou’s minimum hourly wage of US$0.97 (RMB7.5).
The companies denied breaking the law, noting that similar investigations in Shanghai, Nanjing and Zhejiang province also cleared them of wrongdoing.
Still, the headlines prompted the All China Federation of Trade Unions (ACFTU), the country’s main trade union, to weigh into the dispute. The ACFTU said in early April that the fast food companies had clearly broken the law and that it planned to widen its own investigation to other parts of China. Li Jianming, director of international affairs for the labor group, said it would "continue to push the foreign companies to set up trade unions".
On April 11, less than a week later, the Guangdong provincial government said the issue was a non-starter and cleared the two companies.
But the government’s reasons for doing this kick-started a debate about workers’ rights in China. Under new minimum wage rules adopted at the beginning of the year, hourly wages are different for full and part-time workers as well as workers in rural and urban areas. These same laws, however, don’t consider work done by students in their spare time as employment.
The Guangdong labor protection bureau said such work is not a formal working relationship and is not entitled to legal protection.
As of press time, the labor protection bureau was still investigating whether the two companies violated laws related to working hours.