Labor groups and fast food companies in California reached an agreement over the weekend that will pave the way for workers in the industry to receive a minimum wage of $20 an hour.
The agreement, which will make changes to Assembly Bill 1228, was announced Monday by the Service Employees International Union and means an increase in the minimum wage for California fast food workers through April. In return, labor groups and their allies in the legislature will agree to demands from the fast food industry to remove a provision from the bill that could have held restaurant companies liable for workplace violations committed by their franchisees.
The agreement is contingent on restaurant companies in California withdrawing a referendum proposal that would have put the bill on the 2024 ballot. Businesses, unions and others have often used ballot measures in California to block legislation or advance their causes. The proposed legislation would also establish a council to oversee future minimum wage increases and issue workplace regulations.
“With these important changes, AB 1228 paves the way for us to make much-needed improvements to the policies that impact our jobs and the lives of more than half a million fast food workers in our state,” said Ingrid Vilorio – grocery worker and union member said in a statement released by the SEIU
Sean Kennedy, executive vice president of public affairs at the National Restaurant Association, said the deal also benefits restaurants. “This agreement protects local restaurant owners from significant threats that would have made it difficult to continue operating in California,” he said. “It provides a more predictable and stable future for restaurants, workers and consumers.”
Last year, the California legislature passed Bill 257, which would have created a council with the authority to raise the minimum wage for restaurant workers to $22 an hour. Gov. Gavin Newsom signed it on Labor Day last year.
However, the bill faced strong opposition from business interests and restaurant businesses, and a petition received enough signatures to place a measure on the November 2024 ballot that would prevent the law from taking effect.
Other business groups in California have successfully used this tactic to change or roll back laws they opposed.
In 2020, ride-hailing and delivery companies like Uber and Instacart lobbied for and won an exemption from a key provision of Assembly Bill 5, signed by Mr. Newsom, that would have made it significantly more difficult for companies to classify drivers as independent contractors rather than employees .
These companies collected enough signatures to place the issue on the ballot as Proposition 22, which passed in November 2020. More than $200 million was spent on the measure, making it the most expensive ballot initiative in the state at the time.
And in February, oil companies received enough signatures for a measure aimed at blocking laws banning new drilling projects near homes and schools. This initiative will be on the ballot in 2024.
Responding to calls from advocacy groups who said the referendum process unfairly benefits wealthy special interests, and in an effort to demystify a system that many Californians find confusing, Mr. Newsom signed legislation on Sept. 8 that aims to do just that , to simplify the referendum referendum process.