The Companies Behind the Surge in Illegal Child Labor
Good Jobs First
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These include companies controlled by private equity firms, which in this analysis are treated as the parents of their majority-owned portfolio companies. We also associate franchises with their national company names no matter how the national company is owned.
Topping the list is the private equity firm Roark Capital.
Fast-food businesses such as Subway, Dunkin’, Auntie Anne’s and Sonic which are
owned or franchised by Roark portfolio companies, accounted for more than $1.7
million in penalties between 2017, when the current surge in child labor
violations began, and 2023, the most recent year for which complete data is
available.
Roark’s properties received more than 2,000 separate violations during those seven years.
In second place is the McDonald’s chain, whose operations together accounted for slightly less than the Roark penalty dollar total but a higher number of individual violations. Every McDonald’s violation was found at a franchised location.
Blackstone comes in third in total penalties because one of its portfolio companies, Packers Sanitation Services Inc. (PSSI), has been penalized $1.5 million for employing scores of children as young as 13 to perform dangerous cleaning work at meat processing plants in eight states.
Other major companies whose properties have been disciplined most often for child labor misconduct include Berkshire Hathaway (owner of Dairy Queen), and Restaurant Brands International (owner of Burger King and Popeyes).
These well-known corporations are among the thousands of companies of all sizes that were fined a total of $27 million by the U.S. Department of Labor’s Wage and Hour Division (WHD) between 2017 and 2023. At the peak of child labor violations in 2022, civil penalties had increased 130% in the last six years—and the number of children affected nearly doubled.
The federal Fair Labor Standards Act (FLSA) restricts the employment of minors according to the age of the worker, the nature of the work and when the work is being performed. Agricultural work protections are laxer and allow children to work as young as 12 with parental consent.
Apart from the FLSA, states have their own child labor laws. These have customarily been designed to improve on federal law – but not recently. Over the past two years, however, legislators in at least 10 states have introduced bills weakening protections, and some proposals go so far as to directly contradict federal age requirements.
Though employers are required to follow whichever law is most stringent, state rollbacks are seen as a tactic to generate pressure to weaken federal rules down the road. In response, 20 states plus the District of Columbia have introduced bills to strengthen child labor protections, and seven states have signed such bills into law.
“The surge in child labor violations in recent years points to the need to make federal rules more, not less strict,” said Good Jobs First Research Analyst and the report’s lead author Siobhan Standaert. “Above all, this means increasing penalties to a level at which they create a more effective deterrent.”
Unlike adult workers, minors do not receive any of the federal penalty amounts imposed on employers. We recommend this discrimination be ended — underage workers themselves should be allowed to claim a portion of those penalties as damages.
Other needed reforms include holding owners of large retail and restaurant chains responsible for violations both at the locations they own and those operated by franchisees. Chronic violators should be disqualified from receiving federal contracts.
Along with tightening their regulations, state labor
departments need to do a better job of disclosing records of their own
enforcement activities, which are currently not readily available in most
states.
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