Andy Cheung, the Pennsylvania-based McDonald's franchisee accused of labor abuse and exploitation by international student guestworkers earlier this month, has agreed to sell his three restaurants.
According to the Wall Street Journal, McDonald's Corporate began investigating the situation immediately after the accusations surfaced.
As part of a guestworker program, students from Argentina, Peru, Chile, Malaysia and other countries, were paid $3,000 each to participate in cultural exchange activities. However, they are instead claiming that the McDonald's franchisee used them as "sub-minimum wage exploitable workforce."
The group claimed they were forced to work shifts as long as 25 hours with no overtime pay or as few as four hours of work a week at $7.25 an hour. They also allege they were forced to pay housing deductions that brought their net pay far below minimum wage, and they were packed into basement housing with up to eight students per room paying $300 each a month.
According to a McDonald's spokeswoman, the franchisee "has agreed to leave the McDonald's system and added that the company is working on contacting the workers to "most effectively address this situation."
Read more about operations management.