Pressure is mounting on international fastfood companies McDonald’s, KFC and Pizza Hut in China, following reports that it is paying its workers at levels below official minimum rates. The All-China Federation of Trade Unions is threatening legal action against the companies if they are found to have underpaid workers.

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The controversy arose last week when it was reported in a local newspaper in the southern city of Guangzhou that the companies had been paying employees in the area around CNY4 (US$0.52) to CNY5 an hour, below the legal minimum hourly wage of CNY7.5 set by the city authorities this year.


McDonald’s and Yum Brands Inc., which owns the KFC and Pizza Hut chains, have both denied breaking Chinese labour regulations.


Li Shouzhen of the All-China Federation of Trade Unions said in a TV interview: “If there really are unlawful employment practices and they refuse to correct their mistakes, the union will complain to labour inspection agencies and demand investigation and punishment according to the law, and even support workers suing in court.”


According to the People’s Daily website, government checks into possible underpayment by the fast-food chains have expanded across southern China’s Guangdong province, and the Beijing News suggested that a similar situation may exist in at least ten Chinese cities, including Beijing and Shanghai.

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McDonald’s operates some 790 restaurants in China, employing around 50,000 people, and is expanding rapidly in the country. Yum Brands operates 2,000 KFC, Pizza Hut and Chinese-style East Dawning restaurants in China.