In a precedent-setting verdict, a California judge has ruled that McDonald’s Corporation does not control the hiring and thus does not control the payment of wages to the employees of its franchisees. The judge ruled that the payment of wages and compliance with federal, state and local labor laws falls to the individual franchise owner and not the franchisor, the McDonalds Corporation. A recent class action lawsuit against McDonald’s was denied class certification and plaintiffs’ representative claims were stricken in the case in point, the alleged labor violation at McDonald’s franchisee Haynes Family Limited Partnership in Oakland. The potential class action lawsuit that was dismissed represented over 1200 current and former McDonald’s employees. These decisions will no doubt set a precedent in many other wage-fraud cases currently pending at franchise giants companies like 7-Eleven, Dominos, and Caltex.

7-Eleven Corporation has been under fire over the past two years by low-wage, immigrant employees claiming that they systematically paid below federal minimum wage requirement. Those that were paid the fair wage claim that they were forced to kick back a percentage of their wages to their employer as a condition of their continued employment.

Domino’s Pizza is accused of the same wage fraud scheme as is 7-Eleven and in addition, threatening low-wage immigrant pizza delivery drivers with deportation and selling Visa sponsorships. An Australian immigrant needs a Visa sponsor in order to legally stay and work in the country.

The Caltex franchise has been accused of taking wage fraud even a step further. Not only is the company accused of all of the wage and immigration fraud mentioned in the first two instances, they are also accused of deliberately creating a franchise model that made it impossible for a franchisee to profit without committing wage fraud and that the deception was a deliberate attempt to put existing franchises out of business in order to reacquire the franchisee at wholesale prices.

It is unknown how the Australian cases will be affected by the American court rulings. It appears that legal efforts within the United States to curb wage-fraud will terminate at the franchisee level for the time being.