McDonald's will raise pay, add benefits for 90,000 workers

McDonald's says it's raising pay for workers at its company-owned US restaurants on the heels of several other major companies, including Wal-Mart, that have announced wage hikes as the economy has picked up. McDonald's owns about 10 percent of its restaurants in the US. 

McDonald's says it's raising pay for workers at its company-owned U.S. restaurants, making it the latest employer to sweeten worker incentives in an improving economy.

The company owns about 10 percent of its more than 14,300 U.S. restaurants, representing about 90,000 workers. The rest are run by franchisees, and McDonald's said they "make their own decisions on pay and benefits" for workers.

The announcement comes as several other major companies including, Wal-Mart Stores Inc., have announced wage hikes as the economy has picked up and made it more difficult to find reliable workers. Over the past 12 months, the unemployment rate has dropped to 5.5 percent from 6.7 percent.

Several cities and states also moved to raise their minimum wages in the past year, while the federal rate has remained at $7.25 an hour.

The change also comes as McDonald's has faced bad publicity from demonstrations over pay and labor practices at its restaurants. Worker groups have also been pressuring the company with lawsuits and cases filed with the National Labor Relations Board and U.S. Occupational Safety and Health Administration on behalf of workers.

In a statement, McDonald's worker Kwanza Brooks of North Carolina called the move "too little to make a real difference" and that it only covers a fraction of workers.

Starting on July 1, McDonald's says the starting wages will be a dollar more than the local minimum wage where company-owned restaurants are located. Wages will be adjusted accordingly based on tenure and performance, it said. By the end of 2016, it said the average hourly wage for McDonald's workers at those stores will be more than $10 an hour.

A representative for the company was not immediately available to provide details on current wages at company-owned stores.

In addition to wage increases, McDonald's says workers at company-owned stores will get paid time off. Employees who have worked for the company for at least a year and work an average of 20 hours a week will be eligible to accrue about 20 hours of paid time off a year.

Workers who don't take the time off will be paid for the value of that time, McDonald's said.

"We are acting with a renewed sense of energy and purpose to turn our business around," CEO Steve Easterbrook said in a statement. "We know that a motivated workforce leads to better customer service so we believe this initial step not only benefits our employees, it will improve the McDonald's restaurant experience."

McDonald's also said it is expanding benefits to help workers at company- and franchise-owned restaurants complete high school and college. It did not immediately provide details on that program.