A McDonalds fast food restaurant is seen in Toronto, May 1, 2014. Reuters/Mark Blinch

American fast-food restaurant chain McDonald's Corp has been ordered to pay US$355,000 (AU$490,000) in civil penalties, undergo 20 months of monitoring as part of a settlement on an immigration-related discrimination claim. The decision was delivered by the US Justice Department on Thursday.

“The settlement agreement also requires McDonald's to compensate lawful permanent resident employees of McDonald's-owned restaurants who lost work or lost their jobs due to these documentary practices,” the DOJ said, in a statement. The department also said the agreement addresses actions by McDonald's and not its franchises, Reuters reported.

The alleged discriminatory action of McDonald’s had caused job loss of many permanent residents who were unable to provide a new green card when sought by the food giant and consequently they were barred from work and lost their jobs, the Justice Department said.

Lawful permanent residents who worked for McDonald's between Sept. 23, 2012 and March 1, 2015, will be eligible for compensation, the statement said.

Dispute over Green card

The investigation by DoJ was triggered by a complaint received on the department's hotline, which revealed that McDonald's had been demanding lawful permanent residents to show their new "Green Card," after their original document expired, the statement said.

The DoJ statement said, this is not at all required by law. At the same time, McDonald's did not follow that policy with its US citizen employees with demands on new documents.

Noting the refusal to accept expired green cards as legal proof of employment eligibility amounts to a violation of federal law, the DoJ said the company also stands to forfeit the back pay disbursed to affected employees.

“Requiring unnecessary documentation of individuals based on their citizenship or immigration status is discriminatory, and the Department of Justice will not hesitate to enforce the law and protect the rights of work-authorized immigrants,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights in a statement that announced the settlement, Russia Today reported.

“We commend McDonald’s for its cooperation throughout this investigation and for committing to compensate its current and former employees who lost wages due to these practices," the DoJ added.

McDonald’s response

McDonald's in its response said it reached a settlement to avoid further expenses.

“We deny any wrongdoing in this matter, but in order to avoid further expense, and ... to cooperate with the Office of Special Counsel, we reached a settlement,” the statement said and added that the company values diversity of thought, background and culture.

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