California Lawmakers to Consider Bill to Raise Fast-Food Workers’ Pay to $20 an Hour

Flags are flown at a car caravan and rally of fast-food workers and supporters for passage of Assembly Bill 257, a fast-food worker health and safety bill, in the Boyle Heights neighborhood of Los Angeles on April 16, 2021. (Mario Tama/Getty Images)

California legislators are close to passing a bill to raise the minimum wage for fast-food workers to $20 an hour after restaurant owners and labor union officials reached an agreement Sept. 10.

The agreement ends a two-year battle between fast-food restaurant giants, franchise owners, and the state over new government oversight and regulations.

Assembly Bill (AB) 1228 must pass both houses of the state Legislature by Sept. 14 for the agreement to be valid. The measure passed the Assembly May 31, and was approved by the state Senate’s Appropriations Committee Sept. 12.

Besides the pay raise, the bill also established a new council dedicated to fast-food industry wages, working hours, working conditions, and health and safety issues.

“AB 1228, as amended, creates a path forward to resolve employer community concerns around the content of AB 257 (2022) while preserving fast food workers’ hard fought efforts to secure a seat at the table and means to raise standards,” the bill’s author Assemblyman Chris Holden said, according to a legislative analysis.

The new minimum wage will only apply to fast-food restaurants in California that are part of a chain with 60 or more locations nationwide. Bakeries that produce and sell bread would be exempt.

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Fight for $15, a national organization promoting higher wages for fast-food workers, applauded the agreement. The group co-sponsored the bill, along with Service Employees International Union (SEIU California).

“After years of organizing [and] pressure from workers, legislation was just introduced in California that gives us a seat at the table, power in the industry, and will raise fast food workers wages to $20/hr,” the group posted Sept. 11 on X, formerly known as Twitter.

A McDonalds restaurant in Gorman, Calif., on April 18, 2022. (John Fredricks/The Epoch Times)

A group led by the National Restaurant Association, the U.S. Chamber of Commerce, and the International Franchise Association—called Save Local Restaurants—filed a lawsuit against California in December 2022 seeking to stop the state from implementing last year’s controversial Assembly Bill 257, The FAST Recovery Act—allowing the group to gather enough signatures to qualify a ballot initiative to repeal it.

A Sacramento Superior Court judge granted a preliminary injunction, stopping the new law from taking effect in January. The FAST Recovery Act would have created a Fast Food Sector Council to regulate the state’s fast food restaurants. The council would also have the power to raise the minimum wage for fast-food workers up to $22 an hour.

According to the Save Local Restaurants coalition, the new law would have made the cost of living in the state worse for 70 percent of Californians who visit a fast-food restaurant each week, increased the cost of food, cost taxpayers millions each year, and eliminated thousands of jobs.

The coalition also opposed AB 1228 before it was amended this week. According to comments made to the Legislature, it claimed the bill would have dismantled the franchise business model in California and made franchisee owners more liable for labor violations.

If passed, the new agreement would repeal the FAST Recovery Act but incorporate some of its provisions, including the creation of a nine-member Fast Food Council. However, the council will include representatives from the fast-food restaurant industry and franchisees or restaurant owners, along with employees and unions.

The California State Capitol building in Sacramento, Calif., on April 18, 2022. (John Fredricks/The Epoch Times)

Also with the new bill, the council could increase the minimum wage each year by up to 3.5 percent or the percentage of increase in the U.S. consumer price index for urban wage earners and clerical workers, whichever is lower.

Additionally, in the agreement, Save Local Restaurants would be required to withdraw its ballot initiative by Jan. 1, 2024.

“This agreement is in the best interest of workers, local franchise restaurant owners, and brands, and protects the franchise business model that has provided opportunities for thousands of Californians to become small-business owners,” Matt Haller, CEO of International Franchise Association, said in a press release. “It provides meaningful wage increases for workers, while at the same time eliminates more significant – and potentially existential – threats, costs, and regulatory burdens targeting local restaurants in California.”

The National Restaurant Association agreed.

“This agreement protects local restaurant owners from significant threats that would have made it difficult to continue to operate in California,” Sean Kennedy, executive vice president of the National Restaurant Association, said in the press release. “It provides a more predictable and stable future for restaurants, workers, and consumers.