LOS ANGELES – Gov. Gavin Newsom on Thursday, Sept. 28, signed long-sought legislation that gives fast-food workers a raise to $20 per hour while creating a statewide panel to develop baseline labor standards on wages, hours and workplace conditions.
Supporters say Assembly Bill 1228’s creation of a California Fast Food Council, coupled with a raise for an estimated half a million restaurant workers in the state beginning next year, marks among the most significant pieces of employment legislation in a generation in an era of rapidly rising cost-of-living increases and economic disparities.
But it was a law that once was on tenuous ground, coming until recently amid a fierce legal battle over the legislation, which critics said could have upended the business model for local restaurant franchises by ending local owners’ autonomy.
Instead, an 11th-hour deal between labor groups and fast-food companies put it on firmer ground.
Newsom, who visited Downtown L.A. on Thursday to sign the bill, said it was a key step forward in a state where California fast-food workers are paid $3 per hour less than comparable service-sector workers, and who are more likely to live in poverty, according to the bill’s supporters.
“We saw the abuse, we saw the inequities in terms of the wages and the treatment and we realized we had a responsibility to do more,” Newsom said. “The future happens here first. This is a state that prides itself not only being on the leading cutting edge, but we recognize businesses cannot thrive in a world that is failing. We’re not just about growth, this state’s about inclusion and that’s the foundational principle.”
When it takes effect on April 1, fast food workers in California will have the highest guaranteed base salary in the industry. The state’s minimum wage for all other workers — $15.50 per hour — is already among the highest in the United States.
Newsom was flanked by supporters of the bills, including Anneisha Williams, a Los Angeles fast-food worker; SEIU International President Mary Kay Henry, SEIU California President David Huerta and Assemblymember and the bill’s sponsor, Assemblymember Chris Holden, D-Pasadena.
Supporters of the bill also touted its establishment of a Fast Food Council, consisting of nine members, that will be tasked with developing minimum standards on wages, working hours and workplace conditions.
The panel, which under the law would be considered a government agency, will include representatives of the fast food industry, franchisees, employees, advocates, and one unaffiliated member of the pubic, and two non-voting members, according to Holden. Members would also provide direction to the governor and executive agencies, regarding the health, safety, and employment of fast food restaurant workers, according to Holden.
“For the last decade, California fast food workers along with workers across the country have organized and marched and gone on strike to demand a voice,” said Mary Kay Henry, president of SEIU. “In the last two years alone, they have waged 450 strikes across the state making clear the need for fast food corporations to treat them with dignity. I am so proud of the Black and Latino women who lead across race to win big for every community — white, Black, brown and Asian.”
The median wage for a fast-food worker in California is $16.31 per hour, union officials said, but the new law will raise the minimum wage for California’s half a million cooks and cashiers to $20 per hour, and seeks to bolster in the workplace through a statewide the Council, supporters say.
The bill would also prohibit a fast-food restaurant operator from retaliating against any employee due to the employee’s participation in or testimony to any proceeding convened by the council.
At the core of earlier versions of the bill was a debate over joint liability. Before a deal was struck between labor and the industry this month, the bill would have required a fast food restaurant franchisor to share with its fast food restaurant franchisee all civil legal responsibility and civil liability for the franchisee’s violations of prescribed laws and orders, or their implementing rules or regulations, according to an earlier analysis.
Some argued that it uprooted owner control over operating decisions including hiring, employee wages, scheduling, benefits and workplace standards. Some said it would have forced national fast-food corporations to beef up franchisor control over franchised restaurants.
Holden has said that some franchisees are violating employee rights at a far higher rate than establishments owned and operated by the franchisor, adding that this often can be completely out of the franchisee’s control although they are often the ones suffering penalties while employees bare the blow of flawed franchise models.
Holden on Thursday was thankful for the agreement, which dropped the joint-liability prong of the law in exchange for an agreement from small business owners, restaurateurs, franchisees to drop the battle to repeal the law through a referendum in November 2024.
“I want to acknowledge that the fast food franchisees and franchisors, for their willingness to come to the table, the willingness to sit down and, at the 11th hour, help be part of a solution,” Holden said. “At the end of the day, you want your government to work to where you are getting things done. Solutions that work, that benefit the people and that benefit the workers.”
On Thursday, some of those interests sounded accepting with the final outcome, adding that the alternative could have been worse. But they also braced for the impact of rising wages.
“Wage pressure is likely to be felt because of AB 1228, but the alternative had AB 257 continued would have been far worse,” said Jot Condie, president and CEO of the California Restaurant Association. “In the full-service sector, where total compensation far exceeds $20 per hour, such pressure is less clear as these continue to be attractive jobs for service employees. It is difficult to know how quickly these pressures will cascade throughout our industry as the continuing tight labor market and differing regional minimum wages cloud the crystal ball.”
Holden introduced the bill back in February but proponents say it is the culmination of a years-long struggle.
Mary Kay Henry, president of the Service Employees International Union International, said the law capped 10 years of work — including 450 strikes across the state in the past two years.
“History is sometimes hard to get a hold of,” Holden said addressing the gathered SEIU 721 union members. “When you’re in the middle of making it, you don’t know you’re making it and it don’t feel good. It is very hard. But what you have done is set in motion something that is going to reverberate around the entire county.”
Anneisha Williams held back tears as she spoke during the news conference just before Newsom signed the bill.
Williams, a mother of six — seven if you count her beloved dog — works at a Jack in the Box restaurant in Inglewood.
“They’ve been with me on the picket line, and they’ve been marching with me as well,” Williams said of her children. “This is for them.”
The Associated Press contributed to this story.