While McDonald’s has announced plans to increase the minimum wage to $10 per hour for the average worker at its 1,500 company-owned restaurants, the largest independent operator of McDonald’s restaurants in Louisiana hasn’t decided whether to follow suit. However, John Valluzzo—whose Baton Rouge-based Valluzzo Companies employs more than 2,300 workers at 47 restaurants in Louisiana and Mississippi—says his company already has a benefits package that exceeds that offered by corporate McDonald’s.
“McDonald’s has announced it will be offering paid vacations and is implementing some scholarship programs,” Valluzzo says. “We already do that. We’ve been doing that for years.”
Valluzzo Companies offers full time employees who have been with the company for at least one year one week of paid vacation, a 401 (k) plan with a 5% match and a profit-sharing plan. The company also has a scholarship program for college students and a supplemental bonus program for high school student employees.
“I don’t know any other independent operator with a 401 (k) plan with a match and one-week paid vacation,” he says.
Still, Valluzzo isn’t prepared yet to say he will raise worker pay beyond the $7.25 per hour, which is the federal minimum wage, though he notes that most of the employees who have been with his company for more than one year earn more than minimum wage anyway.
McDonalds announced the pay raises for the roughly 90,000 employees who work in its corporate-owned restaurants earlier this month. Beginning in July, the average hourly rate for employees is to rise to $1 above the minimum wage, with wages to rise to at least $10 an hour by the end of next year.
But just 10% of all McDonalds restaurants are corporate-owned. The rest are owned by franchisees such as Valluzzo, all of whom must now decide whether or not to follow suit with the corporate pay raise plan.
Valluzzo says he wants to better understand the details of what corporate McDonald’s is offering its employees before deciding what to do locally. Later this month, he will be meeting with other franchise owners and representatives from corporate McDonald’s to discuss the issue. On balance, Valluzzo believes the move by the parent company will be positive for employees. He also predicts it will prompt independent operators to take a thorough look at employee compensation packages.
“I think this will cause operators to go back and look at the entire equation of what they pay their people,” he says. “We will, too … and ultimately we will do what the market dictates.”
Valluzzo’s brother and father operate a separate company, Valluzzo Family Restaurants, which is also a large franchisee of McDonald’s restaurants. It is unclear what that company will do with respect to the minimum wage issue. Owners could not be reached for comment.
—Stephanie Riegel
