McDonald's Holdings Co. – said Tuesday it will introduce a system Aug. 1 to provide overtime pay to some 2,000 outlet managers and area market developers across the country who have not been getting paid for extra work hours.
The move comes after the Tokyo District Court ruled in January that the fast-food chain should pay its outlet managers for overtime because they are given no administrative authority. Granting such authority is usually the criteria that allows companies not to pay overtime to managers.
The media have taken to calling outlet managers “managers in name only.”
The court ordered the company to pay ¥7.5 million in overtime to outlet manager Hiroshi Takano, 47, who had sued the firm.
“We studied ways to increase public trust in us,” McDonald’s President and Chairman Eiko Harada told a news conference in Tokyo, and reviewed the company’s conventional wage system in line with this goal.
But the company denied any link between the new wage system and the court ruling, which it has appealed.
Takano commented on the company’s announcement, saying, “Although it is a step forward, the aim of my lawsuit was to reduce the workload of outlet managers. But the company didn’t mention it.”
The new system will allow outlet managers and area market developers to receive a combination of overtime pay and performance-based wages, McDonald’s said.
It will likely prompt other fast-food chains to follow suit.
Lotteria has already set up a task force to study a similar move. An official of Skylark, meanwhile, said, “We have been urged by a labor union to study ways” to pay outlet managers for overtime.
Under McDonald’s new wage system, however, the overall pay for outlet managers will change little because they will lose special allowances they had been getting, the company said.
Industry watchers say if outlet managers are paid all the overtime they are due, labor costs would start to balloon and possibly deal a heavy blow to fast-food chains’ financial situation.