- McDonald's is pushing the Trump administration to make changes to a coronavirus relief package that President Trump signed into law Wednesday that requires companies with 50 to 500 employees to give employees two weeks of paid sick leave, Business Insider reports. The chain is concerned that this policy would hurt its franchisees' profitability, according to BI. The publication reports it obtained a recording of an internal McDonald's call with the White House on Monday.
- On the call, McDonald's executives said the company would eliminate effective rent for March and base rent in April and May to ease financial pressure on franchisees, BI reports. Executives also reportedly said it would postpone scheduled ground breaks for new restaurants and would reduce media spending.
- “McDonald’s supports the bill that would provide sick leave support to employees impacted by Coronavirus, and in fact, McDonald’s and many of its franchise owners have already committed to offer those same benefits to potentially diagnosed employees. At the same time, we are sensitive to the economic pressures independent owner-operators face and are supportive of efforts to ensure they have the cash flow needed to keep their employees working," David Tovar, McDonald's VP of U.S Communications & Government said in a statement emailed to Restaurant Dive.
With 95% of the McDonald's restaurants being franchised, mandatory two-week paid sick leave would put an extra financial burden on operators as the effects of COVID-19 eat away at the margins of restaurants big and small.
Last week, McDonald's announced that it will pay two weeks paid leave to workers at corporate-owned restaurants who are asked to quarantine for 14 days. The company told Restaurant Dive that it and many of its franchisees already offered full- and part-time workers up to five days of paid time off each year. But this new benefit impacts less than 5% of McDonald's workforce, which totaled around 205,000 employees last year, according to Statista data.
Labor advocacy group Fight for $15, which includes McDonald's employees, has demanded that the chain offer paid sick leave to workers at franchisee-owned stores if they or an immediate family member show symptoms of coronavirus until they test negative, if they are quarantined and if they need to stay home to care for children due to school closures. The group has also called for McDonald's to foot the bill for testing and treatment of COVID-19 if a worker contracts the virus.
McDonald's isn't alone in its frustration over the coronavirus law — the International Franchise Association was also critical of the package.
"The construction of the paid leave mandate and refundable tax credit leaves small businesses with a significant and immediate cash flow crisis for the next six to eight critical weeks," Matt Haller, IFA's senior vice president of government relations and public affairs, wrote in an open letter earlier this week.
BI reports that McDonald's has also encouraged franchisees to express concerns about paid sick leave requirements to local representatives.
The situation highlights the catastrophic impact coronavirus is having on the U.S. restaurant landscape. Both restaurant owners and employees face an incredibly unstable future, and the NRA predicts a $225 billion loss for restaurants and 5 million to 7 million lost restaurant jobs within the next three months. Despite its profitability concerns, the fact that McDonald's is balking at providing service workers with paid sick leave in an environment as volatile as this could do permanent damage to its brand perception. The restaurant industry is already notorious for not offering paid sick leave as a standard benefit, and this situation — coupled with existing trends toward more progressive leave policies led by restaurants like Starbucks and Sweetgreen, could make McDonald's look antiquated and apathetic.