Fast food workers in California are set to see an increase in their hourly wages following a recent labor agreement. The deal is part of Assembly Bill (AB) 1228, dubbed the Fast Food Franchisor Responsibility Act, which has been under consideration since its introduction to the California State Assembly in February.

Under the terms of the agreement, fast food workers will now be entitled to a minimum wage of at least $20 per hour by April. This wage increase comes alongside various workplace regulations and the establishment of a council responsible for overseeing future adjustments to the minimum wage in the industry.

“It is a powerful, amazing day,” said Tia Orr, executive director of Service Employees International Union California. “The new bill really clears a path for workers to have their victory back.”

It is a powerful, amazing day.

Tia Orr, executive director of Service Employees International Union California

In exchange for increased worker protections and higher wages, state lawmakers made concessions to address some of the restaurant industry’s concerns. The California legislature agreed to remove a provision within AB 1228 that would have held restaurant companies liable for workplace violations committed by their franchisees.

“This agreement is in the best interest of workers, local franchise restaurant owners, and brands and protects the franchise business model that has provided opportunities for thousands of Californians to become small business owners,” said Matt Haller, president and CEO of the International Franchise Association.

Members within the Service Employees International Union have lauded the bill for what they see as “much-needed improvements” to the working conditions and compensation of fast-food employees. Meanwhile, officials from the National Restaurant Association have also expressed support for the legislation, contending that it safeguards “local restaurant owners from significant threats that would have made it difficult to continue to operate in California.”

“With these important changes, A.B. 1228 clears the path for us to start making much-needed improvements to the policies that affect our workplaces and the lives of more than half a million fast-food workers in our state,” said Ingrid Vilorio, a fast-food worker and member of the Service Employees International Union.

“[AB 1228] provides a more predictable and stable future for restaurants, workers, and consumers,” said Sean Kennedy, executive vice president of public affairs at the National Restaurant Association.

California attempted to implement a similar law last year when Gov. Gavin Newsom (D) signed AB 257. That bill would have set the minimum wage at $22 per hour, but various restaurants and business interest groups opposed the legislation. Ultimately, a petition garnered enough signatures to place a measure on the November 2024 ballot aimed at preventing the law from taking effect.

This tactic of using ballot initiatives to counter legislation has been employed successfully in the past by several business groups in the state. Uber, Instacart and oil companies have all utilized this method in attempts to strike down laws that run afoul of their business interests.

The practice has not been without controversy, as advocacy groups argue that it disproportionately favors wealthy special interest groups. In response to these concerns, Newsom recently signed legislation, known as AB 421, aimed at simplifying the referendum process.

“It’s a bitter irony that the ballot initiative, a tool used all over the world to advance democracy, is used in California to short-circuit and cancel democracy here,” said Joe Mathews, a columnist for Zocalo Public Square in Los Angeles.   

Regarding the pending referendum to block the previously passed $22 minimum wage, restaurant companies will need to withdraw the 2024 ballot measure for the latest revised deal to move forward.