Industry Group Snares California Law That Could Raise Fast-Food Wages to $22

A man walks past a 'Hiring' sign at a McDonald's restaurant in Garden Grove, Calif., on July 8, 2022. Robyn Beck/AFP via Getty Images

An industry coalition says it has collected enough signatures to halt a new California law that aims to improve pay and working conditions for fast-food employees across the state, arguing that the legislation would lead to higher food prices and job losses.

The Save the Restaurants Coalition said on Nov. 5 it has collected the 1 million signatures necessary to trigger a statewide referendum on Assembly Bill 257, the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act), which is scheduled to take effect Jan. 1.

If California’s secretary of state verifies the signatures submitted, implementation of the law will be put on hold until voters have the opportunity to decide its fate in a referendum vote in November 2024. California Gov. Gavin Newsom signed the bill into law on Labor Day.

The FAST Act applies to fast-food chains that have 100 or more locations nationally, and would create a 10-member council within California’s Department of Industrial Relations that would set industry-wide minimum standards on wages, working hours, and other conditions.

The bill authorizes the council to raise minimum wages to as high as $22 an hour for 2023, with the option to increase it further each year based on inflation. California’s minimum wage is currently $15 an hour for companies with at least 26 employees, and will rise to $15.50 next year.

The law also establishes new employee protections against discrimination and retaliation. Policies set by the council would override any conflicting rules or regulations of other state agencies. The council would be made up of government officials, workers, union representatives, and advocates for fast-food franchisors and franchises.

The Save the Restaurants Coalition—which is led by the U.S. Chamber of Commerce, the National Restaurant Association, and the International Franchise—said the bill will stifle job growth and drive up fast-food prices by an estimated 20 percent at a time of record inflation.

“Even worse, labor organizations supporting the FAST Act have made it clear they don’t intend to stop with California or quick-service restaurants but will seek to impose a regulatory regime where government-created boards control how small businesses around the country operate,” Glenn Spencer, senior vice president for employment policy at the U.S. Chamber of Commerce, said in a statement.

The bill’s supporters include the American Federation of Labor and the Congress of Industrial Organization (AFL-CIO), the nation’s largest federation of unions, which hailed the signing of the bill in September as a “landmark win” that would raise wages for more than half a million fast-food workers across California and help protect them against discrimination and harassment.

The Save the Restaurants Coalition, which launched its signature campaign in September, has raised millions from big restaurant chains, including Burger King, Domino’s, McDonald’s, Subway, and Yum Brands, to fight the law, according to reporting by The Wall Street Journal.