California Enacts Minimum Wage Increase for Fast Food Workers

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In a significant development for fast food workers and union organizers, California has taken a decisive step by raising the minimum wage for fast food employees.

Amidst the resounding chants of “when we fight, we win” from fast food workers and members of the Service Employees International Union (SEIU) in Los Angeles, California Governor Gavin Newsom officially signed legislation on Thursday that elevates the minimum wage for fast food workers to $20 per hour. Additionally, the legislation establishes a council with the authority to approve further wage increases in the future. This momentous decision comes as the state’s current minimum wage stands at $15.50 per hour and is set to increase to $16 per hour on January 1.

The new minimum wage for fast food workers will become effective on April 1 of the upcoming year, with eligibility extended to employees at fast food establishments with at least 60 nationwide locations.

A pivotal aspect of this legislation is the creation of a nine-member fast food council, comprised of two representatives from the fast food industry, two from franchisee groups or restaurant owners, two representing employees, two from employee advocacy organizations, and one member of the public.

From 2025 through 2029, the council is granted the authority to annually increase the minimum hourly wage for fast food workers by a maximum of either 3.5% or the annual change in the consumer price index (CPI), a federal government metric measuring inflation and goods prices—whichever figure is lower. During this period, only the council will have the power to set wages for fast food workers. Importantly, the legislation limits the council’s authorization through 2029.

Furthermore, the council is empowered to recommend additional labor, health, or safety standards for consideration by relevant governing bodies.

California law to increase minimum wage for fast-food workers won’t apply to everyone

A Hard-Fought Battle

The version of the law signed by Governor Newsom supersedes an earlier iteration that was passed and enacted into law last year. The restaurant industry vehemently opposed the previous law, investing significant resources in lobbying efforts. Ultimately, the law was temporarily suspended pending a referendum scheduled for November 2024, which would have allowed voters to repeal it.

This new legislation replaces the prior version, known as AB 257, and addresses concerns raised by industry stakeholders. Notably, the earlier law was criticized for granting the council the authority to create regulations related to working conditions, workplace safety, wage increases, and other measures affecting the industry. An industry lobbying group stated in a bulletin that this new law does not confer lawmaking authority upon the council. Additionally, it noted that fast food companies and their franchisees had committed over $120 million to persuade voters to reject the original law during the November referendum.

An SEIU spokesperson clarified, “The council still has the ability to create rules around wages, working hours, workplace safety and more, as they were under AB 257. These rules are subject to the state’s standard rulemaking process.”

Sean Kennedy, Executive Vice President of Public Affairs at the National Restaurant Association, commented that “the governor’s signature on this bill brings to an end a years-long and expensive fight over the regulation of the California quick service industry.” He further acknowledged the challenges posed by the law while expressing confidence that restaurants would navigate them with stable and predictable regulations.

A Brighter Future

The arduous path to this outcome amplifies the significance of this achievement, as highlighted by SEIU International President Mary Kay Henry. She noted that “the brightness of this day [is] even more fantastic” due to the obstacles faced along the way. Henry expressed confidence that the legislation would substantially enhance conditions for California’s more than 550,000 fast food workers, a majority of whom are women and people of color. She emphasized that the law also serves as inspiration for workers organizing in other states, demonstrating that they too can have a seat at the table with their employers.

Anneisha Williams, an employee at Jack in the Box in California who spoke at the signing event, emphasized the personal impact of the higher wage. For Williams, the increased pay means greater financial stability, with more funds available to cover bills, provide for her children and pet, and potentially lift herself out of poverty. Currently earning $17 per hour, Williams expressed the importance of having a voice in the council’s discussions with corporations and companies.

“I’m grateful to… finally be able to sit down with these corporations and these companies and discuss some of the issues that we’re having,” she stated. “We’re here to make a change and to make things work out for everybody. And that’s what we want them to understand.”

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