California Bill Allowing State Panel to Set Fast Food Worker Wages Clears Senate

California state senators passed a bill Monday that aims to improve work conditions and wages for fast food workers, clearing a key hurdle on the way to Gov. Gavin Newsom’s desk in the waning days of the legislative session.

The measure, Assembly Bill 257, would authorize the creation of a Fast Food Council to establish “sector-wide minimum standards” for wages, working conditions and working hours. The council would be made up of 10 members appointed by the governor, the speaker of the Assembly and the Senate Rules Committee.

Senators approved the bill in a 21-12 vote Monday.

The bill was amended in the Senate to define a “fast food chain” as a set of restaurants with 100 or more establishments nationally (the original bill had the number set at 30), set a $22 cap on wages promulgated by the council in 2023, and establish a sunset date of January 2029 for the council. An amendment to the bill also scrapped a “joint liability” provision, which would have made franchisors jointly liable if a fast food franchisee was found in violation of workplace rules and regulations set by the council.

Supporters of the bill argue that AB 257 will provide a bargaining “seat at the table” for California’s more than half a million fast food workers who have historically faced unsafe working conditions and wage theft. But critics of the legislation, including several Republican lawmakers who voted against the bill on Monday, have raised concerns that the bill could result in increased consumer costs.

An analysis released last month by the UC Riverside Center for Economic Forecasting Development found that higher labor costs will result in consumers seeing higher food prices within the limited-service restaurant industry. Specifically, if “limited-service restaurant worker compensation increases by 60%, limited-service restaurant prices would increase between 20% and 22%,” the report states.

“AB 257 will raise food prices for tens of thousands of establishments ranging from yogurt shops to salad bars, burger houses and restaurants frequented by families who are struggling under the record high inflation,” Sen. Shannon Grove, R-Bakersfield, said Monday.

Fast food workers and union leaders from across the state praised the passage of AB 257 Monday, saying it brings forward a new model to give workers a voice.

“For far too long, fast food corporations like McDonald’s have leveraged their power and influence to rig the rules in their favor and silence the voices of frontline workers,” Service Employees International Union President Mary Kay Henry said during a press call Monday. “With AB 257’s passage, workers and legislators are standing together to check corporate power in a very significant way – getting all the stakeholders to a table to set standards and make fast food jobs in California good jobs.”

The bill must still be heard and passed once more in the Assembly before it heads to Gov. Gavin Newsom’s desk, but opposition groups are already pushing for the governor to veto the measure.

Matthew Haller, president and CEO of the International Franchise Association, released a statement Monday urging Newsom to veto the bill, calling it a “discriminatory measure designed to target the franchise business model.”

“The bill creates an arbitrary standard for one sector of workers while punishing small business owners and their customers,” Haller said. “Franchising has opened the door for hundreds of thousands of entrepreneurs to pursue their dreams and millions of workers to establish a career, but this bill stands to break all that down while raising prices for Californians and forcing restaurants to close their doors.”

The legislative session ends on Wednesday, meaning lawmakers in the Assembly have just two days left to vote on the bill. Supporters said Monday they are “very confident” that Newsom will sign the bill if it lands on his desk.

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