The minimum wage for fast food workers in California may increase as part of a new deal reached between industry leaders and labor unions.
The policy would ensure a mandatory hourly raise of nearly $5. The roughly 500,000 people in California employed by any fast food restaurant that has 60 or more nationwide locations would earn $20 an hour beginning on April 1, 2024. The minimum wage rate could be raised by a council each year until 2029.
Governor Gavin Newsom set the stage for the wage negotiations in 2022 when he signed into law Assembly Bill 257, which expanded the power granted to fast food workers. The law created a 10-person Fast Food Council and set the minimum wage increase for employees of fast food chains with 100 restaurants or more at $22 an hour.
“California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state’s prosperity,” said the governor in a statement, per AP News. “Today’s action gives hardworking fast food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry.”
Restaurant owners and industry executives warned the law – and potential minimum wage hikes – would result in higher costs to consumers.
“Before the law could take effect, the fast food industry gathered enough signatures to qualify a referendum on the law in the November 2024 election. That meant the law would be on hold until voters could decide whether to overturn it,” reports KCRA. “Furious, labor unions sponsored legislation this year that would have made fast food companies like McDonald's liable for any misdeeds of their mostly independent franchise operators in the state.”
Ultimately, business groups and labor unions spent this summer negotiating a compromise. Labor unions agreed to withdraw liability legislation to secure the higher minimum wage.
There are exemptions to the proposed rule. Fast-casual eatery Panera Bread would not be required to pay workers the newly increased minimum wage as the policy will not apply to restaurants that bake and sell bread as a stand-alone menu item.
“I think fast food cooks and cashiers have fundamentally changed the politics of wages in this country and have reshaped what working people believe is possible when they join together and take on corporate power and systemic racism,” Mary Kay Henry, international president of the Service Employees International Union, said in a statement, per ABC News.
The proposal, submitted to the California legislature on Sept. 11, must still be passed and signed by Newsom.
Under current state law, fast food workers in California earn $15.50 an hour – one of the highest minimum wages in the country.
