Fast-food giant McDonald’s will boost wages and paid time off for its employees this summer.
Starting July 1, the Illinois-based company will raise pay by $1 above local minimum-wage requirements for about 90,000 workers across all levels of experience at about 1,500 company-owned restaurants.
The food chain, which has struggled with declining sales in recent years, said the increase applies to about 10 percent of McDonald's restaurants nationwide.
"We are acting with a renewed sense of energy and purpose to turn our business around," said Steve Easterbrook, McDonald’s president and CEO, who took over on March 1.
"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," he said in a statement.
Critics of the fast-food chain have been calling for more sweeping boosts to pay and benefits. Fast-food employees from numerous chains held a day-long strike for higher wages in dozens of cities last year.
The new policy doesn't apply to McDonald's franchisees, which own about 90 percent of the chain’s more than 14,300 restaurants in the United States — a fact that could prompt additional criticism.
Those stores separately decide pay and benefits.
The plan also will give employees with at least one year of service a chance to accrue paid vacation time.
An employee who works an average of 20 hours per week will be eligible to accrue 20 hours of paid time off each year. Employees who don't take the time off will be paid for it.
"We've 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," Easterbrook said.
The company also said it is expanding educational programs for eligible employees, affecting about 750,000 workers, at both company-owned and franchised restaurants, with free high school completion and college tuition assistance.
By the end of 2016, McDonald's projects that the average hourly wage rate for McDonald's employees at company-owned restaurants will be at least $10 an hour.
The federal minimum wage is $7.25 an hour but 29 states and a number of cities have raised pay floors above that limit in recent months.
The McDonald's decision also comes on the heels of Wal-Mart’s recent move to raise wages amid a stronger push nationwide — especially from labor unions — to respond to wage stagnation among lower-skilled workers.
Sen. Patty MurrayPatricia (Patty) Lynn MurrayTexas abortion law creates 2022 headache for GOP Top Democrat says he'll push to address fossil fuel tax breaks in spending bill Faith leaders call on Congress to lead the response to a global pandemic MORE (D-Wash.) is pushing for a federal $12 minimum wage by 2020, above the $10.10 an hour proposed by the White House.
Wal-Mart announced in February that it would raise its starting wage to $9 an hour in U.S. stores, beginning this month, affecting as many as 500,000.
Labor groups cheered the McDonald's decision but said more needed to be done to help struggling workers.
“Today, workers proved that by joining together, they can improve their lives,” said Mary Kay Henry, international president of the Service Employees International Union.
"McDonald's was forced to pay up, but it’s not nearly enough,” she added.
Ross Eisenbrey, vice president of the Economic Policy Institute, said the fact a $1 raise for 90,000 workers is headline news is evidence of how low the bar has been set.
"All workers should receive regular wage increases as productivity rises, and yet despite rising productivity, Americans’ wages have been stagnant for three-and-a-half decades."
Family Values at Work, a network of coalitions in 21 states working to pass family-friendly workplace policies, credited the change to workers' demands for higher wages.
“Today’s wage announcement and the addition of paid sick days for nearly 90,000 workers by McDonald’s is a direct result of their courage and determination,” said Ellen Bravo, executive director of the group.
This story was updated at 7:15 p.m.