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California Senate passes bill aimed to help fast-food workers

A California bill that aims to improve and standardize working conditions for fast-food workers has won passage in the Senate, all but ensuring it will reach the desk of Gov. Gavin Newsom despite firm opposition from business interests, which say it unfairly targets the fast-food industry and will drive up food prices.

The centerpiece of Assembly Bill 257, dubbed the Fast Food Recovery Act, is the creation of a state Fast Food Sector Council with the authority to establish standards for wages, working hours and conditions. The council would set aside seats for business and worker representatives.

“We’re looking to give workers a voice on the job, and for workers in the fast-food industry, which will continue to try to organize, it’s tough,” said former legislator Lorena Gonzalez, the original author of the bill who is no longer in the Assembly. “They’ve never had a voice on the job, and traditional organizing hasn’t worked.”

The bill fell two votes short in the Assembly in the previous legislative session but passed in January this year after being reintroduced by Assemblyman Chris Holden (D-Pasadena). It will return to the Assembly before Wednesday for another vote as a formality due to several amendments made while in the Senate to alleviate the concerns of some lawmakers.

Newsom has not stated a position on the bill, but 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 a “fragmented regulatory and legal environment” for employers.

One major change was the removal of a joint liability clause that would have made a corporate franchiser responsible for labor law violations of its franchisees, a provision that opponents of the measure argued would greatly discourage franchising in the state.

Another reduces the size of the governing council and the number of seats allocated to state regulators, originally seven of 13 spots. The revised 10-person council includes four seats held by fast food franchiser and franchisee representatives and four seats held by fast-food worker representatives and advocates.

The last two seats are for representatives of the Department of Industrial Relations and the Governor’s Office of Business and Economic Development, both of which are gubernatorial appointees.

The new version of the bill also limits the minimum wage from rising above $22 an hour in 2023.

The legislation has been heavily opposed by the California Restaurant Assn., International Franchise Assn. and California Chamber of Commerce, which together sponsored the Stop AB 257 campaign.

Jot Condie, president of the CRA, said the amendments don’t change the fact that the legislation still creates a council with rule-making authority that bypasses the Legislature.

“You can shift the council around, but it doesn’t change the fact that they are handing the keys to an unaccountable council to do fundamental work,” Condie said. “Fundamental matters in workplace policy should be considered and dealt with by elected officials.”

Condie pointed to California labor law enforcement data that shows fast-food restaurants account for only 1.6% of labor violations across all sectors and the sector is one of the “better performers in compliance.”

If the council chose to raise the minimum wage to $22 an hour, it would lead to an increase in restaurant food prices by 20%, the bill’s opponents say, citing a report from the UC Riverside School of Business’ Center for Economic Forecasting and Development.

Fast-food workers across California have rallied in support of the bill, especially in light of the COVID-19 pandemic, which has given service industry workers new frustration and visibility as they continue to operate in grueling, sometimes hazardous conditions.

A study by the UCLA and UC Berkeley labor centers found almost two-thirds of fast-food workers have experienced wage theft, and over half have faced health and safety hazards on the job. Of the workers who raised concerns with their employers, about a third reported that their employer did nothing to resolve the issue, while 25% experienced retaliation, the study found.

Sectoral bargaining, in which unions negotiate for workers across an entire industry, is common in Europe. Though not exactly the same, the council established by AB 257 would be the first sectoral council of its kind in the U.S., to Gonzalez’s knowledge.

Gonzalez said she believes the amendments have addressed many of the concerns lawmakers and business interests had with the initial iteration of the bill.

“Now it’s simply do you believe that workers should have a voice at the table, bring up issues and set standards around the workplace?” Gonzalez said. “That’s all.”

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