California's Sweeping New Labor Law for the Fast-Food Industry
Striking McDonald's restaurant employees lock arms in an intersection before being arrested, after walking off the job to demand to demand a $15 per hour wage and union rights during nationwide 'Fight for $15 Day of Disruption' protests on November 29, 2016 in Los Angeles, California. Photo by David McNew/Getty Images
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It creates a path to mandate wages up to $22 an hour, among other provisions. Advocates who backed the first-in-the-nation effort say they plan to push for similar legislation in other states.
California will set new wage and working condition standards for fast-food restaurants under a bill signed into law this week by Gov. Gavin Newsom.
Assembly Bill 257, which received strong pushback from fast-food companies and business groups, will establish a 10-member council to oversee the industry. The panel is also empowered to raise the hourly minimum wage for fast-food workers up to $22.
Union officials who supported California’s first-in-the-nation effort are now gearing up to push for similar legislation in other states.
“Fast-food leaders from states around the country came into California and helped with the movement-building that was happening for AB 257,’’ said Mary Kay Henry, president of the Service Employees International Union, which represents close to 2 million workers around the nation. “I’m quite certain that those fast-food workers that have been in this decade-long fight with McDonald’s, Wendy’s and Burger King are going to ask their legislators to propose legislation like 257 in their state.”
Speaking to reporters on Labor Day, shortly after Newsom announced that he had signed the bill, Henry declined to say what other states SEIU is targeting.
“We are in conversations in several other states but because we’re in the discussion stage, we aren’t in a position to announce where,’’ she said.
The California legislation has its roots in the “Fight for 15” movement, launched by labor activists about a decade ago to push the minimum wage to $15 an hour. Several states, including Massachusetts, Connecticut, Maryland, Illinois and parts of New York, have since begun gradually raising their wages to meet that threshold. California’s overall minimum wage will rise to $15.50 next year.
“Today’s action gives hard working fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry,’’ Newsom said in a statement.
Business groups, including the U.S. Chamber of Commerce, opposed the bill, calling it a “radical proposal to micromanage the fast food industry.” Critics predict it will lead to higher prices—including a $10 Big Mac—as well as increased automation. “Get ready for more automated kiosks,’’ state Sen. Melissa Melendez, a Republican from Riverside County, tweeted. “Why pay a human being to get your order wrong when you can have a computer get it right and pay less.”
Proponents of the bill say it will markedly improve the lives of fast-food workers in California.
“It will have an immediate impact on elevating the voice of the fast-food worker by giving them a say in determining workplace standards, calling out workplace inequities around wages, safety or issues of harassment or retaliation,’’ said Assemblyman Chris Holden, a Democrat and the chief proponent in the legislature.
Holden, the former owner of a Subway franchise, said he would have welcomed such a measure when he worked in the industry. “I remain hopeful the opposition to this bill will give it a chance to work,’’ he said during the news conference following Newsom’s signing of the law.
Ken Jacobs, chair of the University of California, Berkeley Center for Labor Research and Education, noted in a blog post last month that about 550,000 Californians work in the fast-food sector, most earning close to minimum wage. Jacobs pointed out that about 60% of the industry's workforce in the state is Latino and two-thirds are women.
"Improvements to standards and working conditions in this industry are overdue and sorely needed," Jacobs added. "Wage theft is rampant, as are health and safety hazards. Workplace violence in the industry has been called a 'crisis,' and has only been exacerbated by COVID-era customer restrictions."
Several sections of the bill, including a provision related to subpoena power, were stripped from the final version. But one provision that remains opens the door to “sectoral bargaining,” a form of collective negotiation over wages and other benefits across an entire industry. The practice is common in Europe, but in the U.S., most negotiations are done on an individual company level.
Henry, the union leader, said she hopes California’s new law will encourage the fast-food chains to begin negotiating with workers, even in the absence of similar state legislation.
“I would join fast-food leaders across this country in calling on McDonald’s, Wendy’s and Burger King to set their own table and not wait for state-based legislation and create a national table where we can solve problems…directly with the multinational corporations that make the franchisees’ and workers’ jobs possible,’’ she said.
Daniela Altimari is a reporter at Route Fifty.
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