McDonald's announced on April 1, 2015 a planned pay raise for 90,000 of its employees that will put its minimum wage a dollar above the government mandated threshold. Photo: UPI/Billie Jean Shaw
OAK BROOK, Ill., April 1 (UPI) -- As governments and companies take action to raise minimum wages for employees nationwide, the world's largest hamburger franchise has announced a similar step that will deliver pay raises for almost 100,000 workers.
McDonald's announced a pay hike Wednesday, which will add $1 per hour above the government's mandated minimum threshold. Presently, the federal minimum wage is set at $7.50 per hour -- however, each state can set higher minimums for its workers.
The chain said beginning July 1, the starting wage at company-owned locations nationwide will be raised to exactly one dollar per hour above whatever is mandated by the state in which it operates.
"By the end of 2016, McDonald's projects that the average hourly wage rate for McDonald's employees at company-owned restaurants will be in excess of $10," McDonald's said in a news release. "The wages of all employees up to restaurant manager will be adjusted accordingly based on tenure and job performance."
McDonald's is the latest major corporation in the United States to announce a heightening of its minimum wage. Walmart announced a $9 hourly minimum in February, which will rise to $10 per hour by 2016 -- and Target followed with similar action last month.
Walmart's wage increase affects about a half million workers, and Target's roughly 350,000. McDonald's said its pay boost will impact about 90,000 employees. By the end of next year, the Oak Brook, Ill., company will be paying an average minimum wage above $10 per hour, the news release said.
"We have been working on a comprehensive benefits package for our employees – the people who bring our brand to life for customers every day in our U.S. restaurants," CEO Steve Easterbrook. "We have listened to our employees and learned that, in addition to increased wages, paid personal leave and financial assistance for completing their education would make a real difference in their careers and lives."
Further, full and part-time employees with at least a year on the job will begin to accrue paid time off, McDonald's said.
"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," Easterbrook said.
However, the pay hike will apply only to workers at restaurants owned by McDonald's -- which amounts to about 10 percent of all U.S. locations. Most locations are owned by franchisees who determine their own wages.