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  • Writer's pictureJustine Noel

California Increases Minimum Wage for Fast Food Workers

In a significant victory for fast food workers and union organizers, California is set to raise the minimum wage for fast food employees. Governor Gavin Newsom signed legislation on Thursday that will increase the minimum wage to $20 per hour for fast food workers in the state. The move has been met with applause from workers and members of the Service Employees International Union in Los Angeles.

The current minimum wage in California stands at $15.50 per hour and is scheduled to increase to $16 per hour on January 1. The new hourly wage of $20 for fast food workers will come into effect on April 1 of the following year. Eligible employees include those working at fast food restaurants with at least 60 locations across the nation.

A crucial element of the new law is the establishment of a nine-person fast food council. This council comprises two representatives from the fast food industry, two from franchisee groups or restaurant owners, two representing employees, two from employee advocacy groups, and one member of the public.

From 2025 to 2029, the council will have the authority to annually increase the minimum wage for fast food workers, capped at either 3.5% or the annual change in the consumer price index, whichever is lower. During this period, only the council will determine wages for fast food workers. The law, however, limits the council's authority to 2029.

Additionally, the council may recommend labor, health, or safety standards for consideration by relevant governing bodies. The legislation signed by Governor Newsom replaces an earlier version that was enacted last year. The previous law faced strong opposition from the restaurant industry, which spent millions on lobbying efforts.

Ultimately, the law was put on hold, awaiting a referendum in November 2024 that would have allowed voters to repeal it.

The newly enacted law, which replaces AB 257, addresses industry concerns by limiting the council's ability to create laws related to working conditions, workplace safety, and wage increases. An industry lobbying group noted that this law does not grant the council legislative authority. Fast food companies and their franchisees had committed over $120 million to persuade voters to reject the original law during the November referendum.

While the revised law eases industry concerns, it still allows the council to establish rules regarding wages, working hours, workplace safety, and more. These rules will follow the state's standard rulemaking process, as was the case under AB 257.

Sean Kennedy, Executive Vice President of Public Affairs at the National Restaurant Association, acknowledged the end of a long and costly battle over regulating California's quick-service industry. He noted that the law presents challenges for restaurants but provides them with stable and predictable regulation.

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