Editor’s note: As 2023 draws to a close, The Signal is presenting CalMatters’ wrap-up stories on some of the key bills that reached the governor’s desk at the close of the 2023 legislative session. Here’s the CalMatters summary of Assembly Bill 1228, which raises the minimum wage to $20 per hour for fast food workers.
By Jeanne Kuang
Assembly Bill 1228 is a deal struck between labor groups and the fast food industry to raise the minimum wage for workers to $20 an hour next April.
It also requires the state in 2024 to convene a new fast food council to set labor standards across the sector, including on wages, safety and other workplace conditions. Local governments will be barred from requiring an even higher fast food minimum wage.
The council, which would operate for five years, would consist of fast food workers, their advocates, restaurant owners, fast food corporations and a member of the public. The state’s labor and business departments would sit in but cannot vote.
All this is contingent on the restaurant industry nixing a November 2024 referendum it qualified to repeal the new council. Assemblymember Chris Holden, a Pasadena Democrat, carried the bill, as well as the 2022 law targeted by the referendum. The deal is only possible because of a brand-new law that allows referendum proponents to withdraw a measure.
Who Supports It
The Service Employees International Union and its Fight for $15 campaign for low-wage workers have been the primary proponents of higher wages and of the council. The International Franchise Association, the California Restaurant Association and a group of industry giants such as McDonalds, In-N-Out and Chipotle were campaigning against it and pouring millions of dollars into the ballot measure to repeal the council, but now say they support the agreement with labor.
Who Is Opposed
Two groups representing the interests of individual franchise owners, the National Federation of Independent Business and the American Association of Franchisees and Dealers, are opposed, arguing the smaller business owners who would be responsible for paying the higher wages were left out of the negotiations for the deal.
Why It Matters
The deal represents a detente in a two-year battle between labor groups and corporations in an industry that employs more than 500,000 Californians who often earn low wages. It averts what would have been a costly ballot measure campaign on the issue next year.
Labor has for years struggled to unionize the fast food industry because of widespread franchise ownership and high employee turnover, and the establishment of the fast food council represents some bargaining power for workers.
AB 1228 gives some workers a definite raise next year (though last December, the average hourly wage for California’s fast food workers was already more than $19). It also gives business owners some stability by temporarily shielding them from potential additional regulations not outlined in the fast food council’s purview.
In exchange, labor groups have temporarily agreed to call off a proposal to hold fast food chains legally responsible for the labor conditions in their franchisees’ restaurants. Business groups large and small had opposed such a change, calling it an existential threat to the franchise model — which is one that has allowed many small and minority business owners to advance.
Still, some franchise owners are upset that the deal locks them into higher wages and more workplace regulations that would come from the council; without the deal, whether the council exists at all would have been up to the voters next November.
The Governor’s Call
Gov. Gavin Newsom signed the bill Sept. 28 at an event in Los Angeles County with workers and labor leaders, who called it “history” and “a significant breakthrough” for millions of workers. “The future happens here first … This is a big deal,” Newsom said, adding that it wasn’t easy to negotiate the agreement.