May 20, 2008 / 10:12 AM / 11 years ago

McDonald's Japan to pay overtime to store managers

TOKYO (Reuters) - McDonald’s Japan 2702.Q, the nation’s biggest fast-food chain, said on Tuesday it would begin paying overtime to managers of its outlets from August, a precedent that is likely to increase costs for Japan’s restaurant industry.

The decision by McDonald’s Holdings Co Ltd (Japan), which is nearly half-owned by McDonald’s Corp (MCD.N), follows a Tokyo court order this year for the hamburger chain to pay 7.55 million yen ($72,370) in overtime and compensation to a former manager.

Hiroshi Takano said he had worked 60 to 80 hours of overtime per month but was not allowed to claim for it after he was promoted to store manager despite having little discretion in setting his work hours, according to media reports.

McDonald’s Japan is appealing the decision.

Company spokesman Kazuyuki Hagiwara said the company would start paying overtime to its 1,700 store managers and to regional managers.

But the hamburger chain said its overall labour costs would not increase as it would adjust the range of performance-linked pay for store managers.

Seiichiro Samejima, an analyst at Ichiyoshi Research Institute, said McDonald Japan’s decision would ripple through the industry.

“It’s definitely going to result in an increase in costs, though a lot will depend on the type of restaurant. Chain stores like McDonald’s will be affected, though they may also lower the status of store managers, cutting their pay and offsetting some costs that way,” he said.

($1=104.31 Yen)

Reporting by Edwina Gibbs; Editing by Hugh Lawson

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