The rollout of a major project to compensate past and present McDonald’s workers for a payroll botch-up dating back 15 years is proving problematic.

McDonald’s is contacting those employed between November 1, 2009, and December 6, 2020, asking them to check a portal on its website to see if they’re eligible for reimbursement.

The company is one of countless employers, including government departments, that miscalculated leave entitlements outlined in what’s proven to be a very confusing Holidays Act 2003.

The pinch is, not everyone who was underpaid will be reimbursed.

People who worked for McDonald’s stores that are now under new ownership may miss out on compensation.

In a question and answer section of the McDonald’s online portal, the company said people might not be paid if the franchisee owner they worked for had closed their company.

Unite union national secretary John Crocker said this was unfair.

“These people have effectively sold their business, or franchise, with a known debt obligation to their workers, onto another franchisee,” Crocker said.

“McDonald’s has been all over this transaction, and approved it, with complete disregard for the workers who are owed money.”

McDonald’s declined the Herald’s request to explain.

Current/former McDonald’s staff took to TikTok to complain.

“Our old franchisee is refusing to pay lol fml,” one user of the social media platform said.

“Get a lawyer,” another person responded.

Meanwhile on Reddit, current/former staff discussed how much they received.

“Wife got $1200 I got $3000, nice little surprise,” one user said.

Another person commented, “$400 from one franchise, $0 from another franchise. One former manager of mine was owed over $10,000... That’s A LOT of underpayment.”

McDonalds wouldn’t say how much it believed it would ultimately pay out, or what the median payout would be.

Payouts will differ depending on the length of employment, the variability of hours worked, and the variability of pay rates.

Once a current/former staff member and the McDonald’s owner agree on a reimbursement value, the payment will be made within a month.

“The project has been one of the most complex remediations undertaken and completed to date,” a McDonald’s spokesperson said.

“McDonald’s worked with the Ministry of Business, Innovation and Employment (MBIE), current and former franchisees, and third party experts, spending millions of dollars and tens of thousands of hours to get to the point where we can commence the remediation payments.”

MBIE has been governing the process of reimbursing people underpaid due to misinterpretations of the Holidays Act.

Accordingly, it worked with McDonald’s to agree on formulas to calculate how much people are owed.

Crocker was critical of the approach. He thought it was unfair underpayments were being offset by overpayments, reducing the amount someone being compensated would receive.

McDonald’s isn’t asking current/former employees to pay back any over-payments made.

The Herald has asked MBIE to comment on Unite union’s qualms.

Crocker said MBIE had identified 200 of the country’s largest employers that had made mistakes under the Holidays Act.

He feared there would likely be numerous smaller employers unaware of their mistakes.

Crocker characterised the Holidays Act as being written in a way that made fulfilling remuneration obligations hard to “systemise”.

Workplace Relations Minister Brooke van Velden is drafting a bill to update the legislation, which MBIE is expected to release for targeted (rather than public) consultation next month.

Van Velden said the exposure draft would change the way annual leave is provided, moving from an entitlement system to an accrual system.

“While workers might not notice any change in their entitlements, from a payroll perspective this should make a huge difference,” she said.

“An accrual system should help avoid the complex calculations that regularly stump payroll software and should therefore reduce compliance costs for employers.”

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.