Fast-food companies pull California referendum, agree to $20 minimum wage

Fast-food companies that spent million of dollars to defeat a worker-protections law agreed over the weekend to pull their referendum from the November 2024 ballot in a move that will give employees a $20-an-hour minimum wage.

The California Legislature has until Thursday to approve the agreement, which would avoid a costly battle with labor unions.

The pay hike, considered modest, would take effect in April. The average hourly wage for California’s 557,000 fast-food workers in December was about $19, according to UC Berkeley economist Michael Reich.

The move, cheered by fast-food cooks, cashiers and baristas, will result in a new set of amendments to Assembly Bill 1228 and pave the way for the creation of a fast-food council, first approved last year in Assembly Bill 257, also known as the FAST Recovery Act.

The council would establish minimum standards on wages and make recommendations on working hours to ensure the health, safety and welfare of workers are developed with proper oversight. It also would have the power to raise the fast food minimum wage to as much as $22 an hour.

The panel would be comprised of nine voting members, including representatives from the fast food industry, franchisees, employees, advocates, one unaffiliated member and two non-voting members.

If approved by the Legislature, the council will meet for the first time by March 15, earlier than it would have if it had to await voter approval in November 2024.

The amendments to AB 1228 also eliminate a controversial proposal that would have held fast-food corporations legally responsible for harassment, wage theft or labor violations that occur at franchise locations.

Assemblyman Chris Holden, D-Pasadena, who authored the bill, said it will establish “a new standard that inspires a safe and prosperous environment within the fast food industry.”

Fast-food companies that have spent millions on a referendum to defeat a proposed worker-protections law have agreed to pull the measure from the November 2024 ballot. (AP file photo)
The amendments also eliminate a controversial proposal that would have held fast food corporations legally responsible for harassment, wage theft or other labor violations labor violations at their franchise locations. (AP file photo) 

With a legislative session set to conclude later this week, fast-food workers and supporters across California are urging lawmakers to quickly advance the amended bill through the Assembly and Senate and send it to Gov. Newsom’s desk.

Matt Haller, president & CEO of the International Franchise Association, said the agreement is “in the best interest of workers, local franchise restaurant owners and brands.”

“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,” Haller said in a statement.

But businesses say additional regulations and higher wages will force fast-food outlets to boost prices for consumers who are already grappling with inflation. In some cases, they say it could result in the closure of restaurants.

Ingrid Vilorio, a California fast-food worker and leader in the Fight for $15 and a Union, applauded the newly forged agreement.

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