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On-base fast food outlets get wage reprieve

Jun. 2, 2014 - 05:07PM   |  
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Military fast food fans will benefit from the easing of new Labor Department wage rules that threatened to cause the closure of many such eateries on installations.

“We are optimistic that many of our industry partners will be willing to continue providing services under these new terms,” said Kathleen Martin, spokeswoman for the Navy Exchange Service Command, which negotiates and oversees contracts for fast food concessionaires on Navy installations.

The Labor Department’s new minimum wage rules instituted last year led several fast-food restaurants to end their contracts on military installations. In March, McDonald’s restaurants closed on three Navy bases and another eatery, “I Love Country,” has closed at Naval Station Pearl Harbor, Hawaii. Military officials had feared that more fast food outlets on bases would follow suit.

Full details of the new wages are expected to be released sometime this week, but Labor officials have already pulled back on one aspect of the wage hike. They initially required payment of a new, additional “health and welfare benefit” at a rate of $3.81 per hour. That has been reduced to 92 cents per hour.

In an April request for a waiver from the new wage rule regulations for fast food workers covered by the Service Contract Act, Navy officials noted that in six areas in Florida, California and Virginia, the increase in the new mandated hourly wage ranges from 72 percent to 76 percent.

“We welcome the reconsideration and look forward to receiving the revised wage determinations from [the Labor Department] so that we may begin negotiations with our industry partners,” Martin said.

Marine Corps Exchange officials referred questions to Navy officials. A Navy spokeswoman referred to the responses provided by NEXCOM’s Martin, in conjunction with Navy officials: “The Department of the Navy remains committed to its goal of delivering affordable food options to our sailors, Marines and their families on our installations.”

The majority of fast food concessions on Army and Air Force bases are unaffected because they are operated directly by the Army and Air Force Exchange Service, not by contract.

In a letter to Labor officials April 8 asking for an exemption from the wage regulations, Russell Beland, deputy assistant secretary of the Navy for military manpower and personnel, said the Navy and Marine Corps exchange officials estimated that unless relief was granted, up to 390 fast food concession operations would close on installations across the U.S. and its territories, with a loss of nearly 5,750 jobs, many held by military family members and veterans.

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