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McDonald’s plans to raise workers’ pay to $10 per hour by end of 2016

April 1, 2015, 8:00 PM UTC
McDonald's Profit Rises 12%, Spurred by Sales Of Frozen Drinks
A McDonald's Big Mac value meal a arranged for a photo in New York, U.S., on Friday, July 23, 2010. McDonald's Corp., the world's largest restaurant chain, posted a 12 percent gain in second- quarter profit after attracting more customers with its frappes and smoothies. Photographer: Jin Lee/Bloomberg via Getty Images
Photograph by Jin Lee — Bloomberg via Getty Images

While fast-food workers across the country plan protests over their wages later this month, employees at McDonald’s-owned restaurants can expect pay hikes starting this summer.

The fast-food giant will raise the average hourly rate for workers at the U.S. restaurants it owns to $9.90 from $9.01 starting July 1, while those average wages will climb above $10 per hour by the end of 2016, McDonald’s announced Wednesday. The company will also allow those employees to earn up to five days of paid vacation every year following one year of employment.

One catch is that the new wages will not apply to fast-food workers employed by McDonald’s (MCD) franchisees, which account for nearly 90% of the company’s U.S. restaurant employees. As it stands, roughly 90,000 McDonald’s workers will see a pay increase starting this summer. The company’s 3,100 franchisees are able to set their own policies when it comes to wages and benefits, McDonald’s said Wednesday.

U.S. fast-food workers are planning a one-day strike as part of a two-year campaign that seeks a $15 hourly wage as well as the right to unionize. Those protests are planned for April 15.

The wage hikes also come one month after Steve Easterbrook took over as McDonald’s CEO following the departure of Don Thompson. The company has dealt with worsening financial problems in recent years, thanks to declining sales and a loss of market share, all of which Fortune magazine detailed in an article last fall.
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