7-Eleven Wage Scandal Analysis

This assignment analyzes the wage scandal that plagued 7-Eleven convenience stores in Australia. It examines reports of underpaid workers, forced repayment schemes, and the company's response to these allegations. The report delves into potential causes of the scandal and explores possible solutions to prevent similar situations in the future.

Introduction
Human Resource Management is a complex system. Almost all large business organizations
these days have an HR department and very often the people working their need to comprehend
complex human behaviors and provide solutions to problems arising in a company due to the
same. This report entails the in-depth study, analysis and recommendations, if any, of a Human
Resources problem in a business organization. For this report, the company chosen is the
globally recognized 7-Eleven convenience stores. 7-eleven is one of the leading convenience
stores across the globe. The wage scandal that this chain company has been a part of is well
known and well hyped.
This report is an attempt to research, study and analyze the wage scandal, discuss the various
potential causes of the problem, and how it could have been avoided. There have a been a large
number of newspaper articles, journals and reports that talk about evidences as to how the
workers in the company were being cheated by their own employers. Human resources is a vast
field and involves less of a scientific approach to analyze and solve problems related to human
behaviors. The study of such cases becomes relevant for comprehension of human resource
problems, why they occur or what causes them, how they get aggravated and how they can be
tackled, avoided or solved.
Company background
With its headquarters located in Irwing, Texas, 7- Eleven is some 90 years old. “Founded in
1927 as an ice and beverage stand in Dallas, Texas, 7-Eleven was called a ‘Totem store’ by its
founder (Mathew, 2016)”. In the year 1946, “The name changed from Tote’m Stores to 7-Eleven
to reflect the new extended hours (©2017 7-Eleven, 2017)”. This international chain has around
a total 56,600 stores and operates in about 18 countries worldwide. Although the company is
American-Japanese, the parent company is located in Chiyoda, Japan and goes by the name of 7-
eleven Japan, co. Ltd. Bouncing back after being hit hard by the great depression, this company's
success story is one of inspiration. In this report however, we shall discuss the wage scandal that
7 eleven was a part of.

Research Problem
It was in the month of August, 2015 when reports of employees being underpaid by certain 7-
Eleven franchisees in Australia were given out by media houses such as Fairfax Media and
ABC’s four corners program. They reported that “many 7-eleven employees were being
underpaid at rates of around A$10 to A$14 per hour before tax, well under the legally-required
minimum award rate of A$24.69 per hour (Adle Ferguson, 2015)”. The ABC News Australia
also uploaded a video onto their website wherein an employee is being beaten and forced to pay
back a considerable portion of her salary or else lose her job. Many workers of the 7-Eleven
came forward to report how they were treated like “slaves”, forced to work over-time and still
not paid. In order for the company to keep its records straight, the employees were being paid
their salaries but then threatened, abused and forced to pay back half the money. “Known in the
industry as the "cash back" scam, workers are paid the full award rate but have to hand back up
to half their pay to the store franchisee (Willacy, 2016)”. Investigation by Four Corners and
Fairfax Media also found out that this largest chain of convenience stores was doctoring payroll
records and underpaying wages to its employees, some as low as 47 cents per hour. This meant
working “almost eight hours just to afford a luxury we all take for granted: a $3.70 cup of coffee
(Dana McCauley, 2016). For most, it was a very shocking news that such a large chain of
convenience stores could be involved in a scandal like this.
REFERENCES-
©2017 7-Eleven, I. (2017). About us. Retrieved september 12, 2017, from www.7-eleven.com:
http://corp.7-eleven.com/corp/about
Adle Ferguson, S. D. (2015, August 29). 7-Eleven: Investigation exposes shocking exploitation of
convenience store workers. Retrieved September 12, 2017, from The Sydney Morning Herald.
Dana McCauley, A. (2016, February 16). ‘Virtual slave’ paid 47 cents an hour to work at 7-Eleven store.
Retrieved September 13, 2017, from news.com.au:
http://www.news.com.au/finance/business/retail/virtual-slave-paid-47-cents-an-hour-to-work-at-
7eleven-store/news-story/3ffc332f3fbd0c5e42fe561690d8bd54
Mathew, A. (2016). 7-Eleven, Inc. Success Story. Retrieved September 11, 2017, from Success Story:
https://successstory.com/companies/7-eleven

Willacy, M. (2016, November 21). 7-Eleven: Covert video captures worker being forced to pay back wage
in cash. Retrieved September 11, 2017, from abc.net.au:
http://www.abc.net.au/news/2016-11-21/covert-video-captures-711-workers-being-forced-to-pay-
back-wage/8033808