Fast-food giant McDonald's said it has dropped a labor supply agency in Malaysia after claims emerged that it was underpaying its migrant workers and housing them in appalling conditions.

An investigation by British newspaper The Guardian said the agency supplying workers to McDonald's was withholding their salaries, which were as low as 75 cents an hour, underpaying promised wages, and confiscating their passports.

The report was based on interviews with 15 Nepali workers who had worked at different McDonald's restaurants in the capital Kuala Lumpur.