Fast food workers and restaurant groups fight over landmark California bill

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(NewsNation) – More than half a million fast-food workers in California could receive more power and protections thanks to a bill passed by the state legislature on Monday, but restaurant owners and industry groups warn that this will do more harm than good.

The measure, known as the FAST Recovery Act, would create a new 10-member fast food council made up of worker delegates, employer representatives and state officials appointed by the governor and legislative leaders who would negotiate the wage and labor standards for the industry.

If approved, the law would allow the council to raise the state’s minimum wage for fast-food workers up to $22 an hour as early as next year. That hike would be 40% higher than the state minimum wage, which is set to rise to $15.50 an hour on Jan. 1.

‘historic victory’ for workers

Unions and worker advocates celebrated the first bill of its kind, which allows fast-food workers to bargain more effectively as an industry, rather than on a store-by-store basis.

The Service Employees International Union (SEIU), which represents nearly two million workers nationwide, called Monday’s passage a “historic victory” and said it will “help establish minimum industry standards in terms of wages, safety and training”, in a press release.

The council could help give a voice to fast food workers like Evelyn Barillas, 38, who said she faced pay theft and sexual harassment during her 20 years in the industry.

“There was never anyone to speak for us,” said Barillas, a single mother of four, who told NewsNation her hours were cut after she refused to go out with her manager.

After applying for legal help, Barillas realized she didn’t have the time or resources to move forward and had to get two more jobs to make up for the hours she had lost.

The SEIU says California fast-food workers have carried out more than 400 strikes and filed nearly “300 safety and wage complaints with local and state agencies” since the height of the pandemic in March 2020 until now.

In addition to creating a statewide council, the new law would allow jurisdictions with populations over 200,000 to create their own local councils to advise the state body on upcoming regulations.

Charge for franchisees

The FAST Recovery Act has drawn strong opposition from many restaurant groups, franchisees and industry experts who say it will drive up prices, hurt small business owners and discourage entrepreneurship.

Under the new law, only fast food brands with more than 100 locations nationwide would fall under the council’s jurisdiction. Industry leaders say this offer unfairly targets large chain franchisees.

“If you are a small business owner and operate two restaurants that are part of a national chain, such as McDonald’s, you may be subject to the bill. But if you own 20 restaurants that aren’t part of a large chain, the bill doesn’t apply to you,” Joe Erlinger, president of McDonald’s USA, said in a statement Wednesday.

According to the International Franchise Association (IFA), an industry trade group that opposes the bill, 70% of the more than 16,000 California franchises that would be affected are owned by single-unit operators.

“It’s portrayed as going after McDonald’s, or Wendy’s, or Burger King, when in reality the local McDonald’s, the local Wendy’s, and the local Burger King are all, in fact, owned by individual businessmen in California,” said Jeff Hanscom, vice president. State-Local Government Relations for the IFA.

Hanscom pushed back against the idea that fast-food workers face labor violations at disproportionately high rates.

A recent analysis of data on labor rights violations by the Employment Policies Institute, a tax conservative think tank, also cast doubt on that claim.

“Across all years of data analyzed, there was approximately one wage claim per thousand private sector employees on limited duty – one of the lowest rates in the industry per employee,” the report determined.

The SEIU’s own survey of fast food workers suggests that violations such as wage theft may be significantly underreported.

One thing is almost certain: a 40% increase in labor costs would drive up prices at fast food restaurants across the state. Hanscom said the majority of that burden will fall on those least able to bear it — people who rely on quick-service restaurants as affordable food options.

and after?

The legislation comes at an important time for the broader labor movement, which saw US support for unions rise to 71% in the latest Gallup poll. As recently as 2009, less than half of Americans said they approved of unions.

Now the bill is heading to the office of California Governor Gavin Newsom, who has until the end of the month to sign it.

It’s unclear what the governor’s position is, though his Department of Finance released an analysis in June opposing the measure, saying it would create “significant ongoing costs” at the Department of Industrial Relations and lead to a “fragmented regulatory and legal environment” for employers.

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