3 minute read
$22 An Hour For Fast‐Food Workers In California?
Gov. Gavin Newsom, on Labor Day, signed AB 257, which could raise the minimum wage for franchise restaurant workers as high as $22 next year. A day later, critics filed a referendum seeking to block it until the matter can be put before voters. The law and the countermeasure have raised questions across one of the state's largest industries.
Advertisement
What is AB 257?
AB 257, also known as the Fast Recovery Act, creates a first-of-its-kind council of workers, corporate representatives, franchisees, and state officials with a mandate to set minimum industry standards on wages, working hours and other conditions for fast-food workers statewide.
Proponents describe the experimental new system as a move to boost the power of workers who have little formal recourse for rampant wage theft and poor or unsafe conditions.
Who is against it, and why?
From the start, AB 257 faced heavy opposition from business trade groups, fast-food corporations and franchisees who argued it unfairly singled out the fastfood industry, would saddle operations with higher labor costs and would jack up food prices.
Does the law immediately raise the fast-food minimum wage?
No. The law creates a 10-person council of workers, union representatives, employers and state officials who will decide whether, when and by how much to raise minimum hourly wages for fast-food workers — up to a point.
The council has the authority to raise the minimum hourly wage for fast-food workers as high as $22 next year. That upper cap rises each year, based on inflation. The council could choose not to raise wages or decide to raise the minimum in smaller increments rather than jumping straight to $22.
Will AB 257 cause food prices to rise?
Yes. In general, minimum wage increases translate to price increases. But those associated increases are likely to be small, some economists say.
Will the law cause jobs in fast food to disappear and hurt business?
Business interests say AB 257 could mean restaurant closures and an overall decline in fast-food industry employment. While employees who keep their jobs may enjoy elevated conditions, the higher costs of labor will cause the industry to shed jobs and establishments, fastfood industry representatives say. Individual businesses may adjust hiring to reduce costs. But on the whole, experts say they do not expect employment rates in fast food to shrink.
Aside from wages, what does AB 257 mean for workers?
Proponents of the law say the greatest benefit of AB 257 is giving fast-food workers a formal seat at the table, as well as more avenues to air recommendations and complaints. The law holds that counties or cities with populations greater than 200,000 can establish local fast-food councils that can hear concerns and provide written recommendations to the statewide council.
The law also appears to create a pathway for workers who are retaliated against to be reinstated and compensated for lost wages or benefits as a result of being fired, having their hours reduced or other punishments through private legal action. AB 257 could create more urgency for existing state health and safety agencies to provide oversight in the industry.
Establishing health standards to mitigate these issues is the purview of the state worker safety agency, Cal/OSHA. The new council has the authority to petition that agency with recommendations, which the agency is obligated to consider and respond to within six months.
What happens next?
AB 257 is set to take effect Jan. 1, but if the referendum qualifies, the law would be put on hold until voters can weigh in — which probably wouldn't be until November 2024.
