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Pennsylvania McDonald's franchisee accused of abusing foreign workers

A national labor group is accusing the owner of six McDonald's franchises in Pennsylvania of abusing the State Department's controversial summer work visas for immigrant students program by underpaying 14 foreign workers and forcing them to live in crowded, overpriced apartments for which his company overcharged them.

In a complaint filed this week with the State Department, the National Guestworker Alliance, a nonprofit activist group based in New Orleans, alleged sub-minimum-wage pay, wage theft, overpriced substandard housing, and retaliation at three of the six stores operated by Cheung Enterprises of Middletown, Pa.

It filed a similar complaint with the Labor Department in February, which it amended in a second filing this week.

Cheung Enterprises didn't return NBC News' calls for comment.

About 50 people who the alliance said included employees and community supporters staged a protest outside one of Cheung's stores Wednesday in nearby Camp Hill.

The National Guestworkers Alliance said 14 student workers, who are from Argentina, Peru, Chile, Malaysia and other countries in Latin America and Asia, paid $3,000 apiece to be hosted by Cheung Enterprises under J-1 temporary work visas. In return, it said, Cheung Enterprises treated them as "cheap, exploitable workers."

It claimed the workers were promised 40 hours of work a week but were scheduled capriciously — some for as few as four hours a week, others for as long as 25 hours in a single shift.

The NGA said Cheung Enterprises forced them to live up to eight to an apartment in substandard housing that he owned, charging rent that "brought their weekly net pay down far below" Pennsylvania's  minimum wage of $7.25 an hour.

When workers complained to federal authorities, they were referred to GeoVisions, the Connecticut organization that arranged their employment and visas, said the new complaints, which were made public Thursday. The alliance claimed that GeoVisions workers made surprise visits to the workers' apartments to intimidate them.

Kevin Morgan, GeoVisions' chief executive, said Thursday night that the allegation "doesn't make sense."

"We try to work with the students. We're really responsible for dealing with any difficulties the students are having," Morgan told NBC News, adding that the organization's chief operating officer was in Harrisburg, Pa., to "get in touch with all of the parties."

"This is a really unusual circumstance," he said, noting that groups of students placed with a host are usually all from the same country. The workers named in the NGA complaints come from several countries on two continents, and "there may be some cultural pressures," Morgan said.

The complaints make no allegations against McDonald's Corp. itself, but in a statement Thursday, Saket Soni, the alliance's executive director, said, "McDonald's abuse of student guestworkers shows how corporations trap guestworkers in sub-minimum-wage exploitation using the fear of deportation." He called for immigration reforms "that let immigrant workers expose abuse without fear."

A spokeswoman for McDonald's told NBC News that the company has a standard franchise arrangement with Cheung Enterprises and doesn't oversee its stores.

"We take the well-being of the employees working in McDonald's restaurants seriously," the company said in a separate statement. "We are working closely with the franchisee to investigate the claims surrounding his program."

A bipartisan group of senators agreed in January to seek an expansion of "guest worker" programs as a way to give illegal immigrants a chance to become American citizens. But such programs are unpopular with labor groups, which contend that employers use it to find cheap temporary labor in place of hiring younger Americans full-time.

The State Department revised the program after workers on J-1 visas walked out at a distribution center for Hershey Co., the chocolate manufacturer, in Pennsylvania in August 2011. The State Department capped the number of J-1 participants allowed in the country at 103,000 and limited some of the industries they could work in.

The Labor Department recovered more than $213,000 in back wages for 1,028 foreign students in a settlement with three outside companies involved in staffing the facility.

Like McDonald's in the current case, Hershey Co. wasn't accused of any abusive practices, and took no part in the proceeding.

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