A last-minute legislative deal could lead to a $20 minimum wage for California’s fast food workers in the coming year and end an upcoming ballot fight between the industry and labor unions.
Service Employees International Union announced the accord Monday, which includes amendments to AB 1228, the latest bill aimed at improving fast food industry conditions. The changes include raising the statewide minimum wage for fast-food workers next April and is contingent on withdrawal of the referendum against AB 257 — last year’s bill that created a fast food council to oversee pay and other workplace issues.
Fast food companies, spending millions of dollars, had been set to try to take down that law through a ballot measure voters would have considered in 2024. The industry must withdraw the referendum by Jan 1, 2024, per the agreement.
“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,” said Matt Haller, President and CEO of the International Franchise Association.
In return, the joint liability portion of AB 1228 will be removed. It would have held companies and their franchisees jointly liable for accusations of harassment, wage theft or other forms of mistreatment. Franchisees and those in opposition believed the increased liability would have given corporations more control and possibly lead to the eventual elimination of franchising.
The bill had stalled in the Senate Judiciary Committee, and would have faced an uphill battle to pass.
“The amendments to AB 1228 put aside valid concerns about the franchisor-franchisee relationship in favor of bringing stakeholders from across the industry together with workers to solve common problems and build a better future,” said Joseph Bryant, executive vice president of the Service Employees International Union, in a statement.
The hike in minimum wage is applicable to workers at fast food chains with more than 60 locations nationwide and prohibits localities from further increasing wages regionally for workers.
The deal also creates a new nine-member fast food council, similar to the one formed under AB 257. It will consist of two representatives of the fast-food restaurant industry, two franchisees or restaurant owners, two fast food employees, two advocates for employees and one neutral member of the public, who will serve as chair.
Council members will be charged with advancing fast food minimum standards until Jan. 1, 2029, when the agreement expires. Until then, it has the authority to increase hourly minimum wages annually by either 3.5% or the change in the Consumer Price Index each year. The council will hold its first meeting by March 15.
AB 1228 won’t be eligible for a vote until Thursday because the last-minute amendments must be in print and available to the public at least three days before lawmakers can pass it.
If the Legislature passes the measure, then it will go to Gov. Gavin Newsom who has not stated a public position on the bill. But Monday’s deal was only possible because of Newsom’s actions last Friday. He signed AB 421, legislation that allows proponents to pull a referendum from the ballot 131 days before the election.
Assemblyman Chris Holden, D-Pasadena, author of AB 257 and AB 1228, said the governor’s office was “very much a part of the conversation” in getting a deal done with the fast food industry.
“Once it started to get to a place where it looked like there was a deal that could be struck, I think the governor’s folks got involved and helped with amendments to tie it all together,” Holden said.
The Bee Capitol Bureau’s Lindsey Holden contributed to this story.