California governor signs fast-food bill with potential $22 an hour minimum wage

California Gov. Gavin Newsom signs the Fast Food Accountability
and Standards Recovery Act that could raise fast-food workers minimum wage
to $22 an hour next year.
File photo by Jim Ruymen/UPI. | License Photo

Sept. 5 (UPI) -- California Gov. Gavin Newsom signed a landmark Labor Day bill into law Monday that could boost the state's minimum wage for fast-food workers to $22 an hour next year, despite loud protests from the restaurant industry.

AB 257, called the Fast Food Accountability and Standards Recovery Act or Fast Act, will create a Fast Food Council comprised of workers' delegates, employers' representatives and state officials. Together, the 10-member council will determine pay, hours and working conditions for fast-food restaurants with more than 26 employees throughout California.

"Today's action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry," Newsom said in a statement. "I'm proud to sign this legislation on Labor Day, when we pay tribute to the workers who keep our state running as we build a stronger, more inclusive economy for all Californians."



Newsom's signing was celebrated by advocacy groups Fight for $15 and the Service Employees International Union which called the new law a "historic victory for fast-food workers' decade-long fight for fair pay and a voice on the job."

The regulations will apply to California fast-food restaurants that are part of chains with more than 100 units nationwide. The new law is estimated to impact about 150 companies and 19,000 locations, according to Restaurant Business.

Since California's state legislature approved AB 257 on Aug. 29, the restaurant industry has blasted the measure saying it will increase fast food prices and hurt smaller franchise operators. The National Restaurant Association warns other states, including New York, Illinois, Oregon and Washington, will likely follow.

"The expected higher wage mandates alone could raise costs for California quick-service restaurants by $3 billion and that cost will likely spread to struggling independent restaurants as well," Sean Kennedy, the NRA's EVP of public affairs, said in a statement. "At a time when California restaurants are struggling with skyrocketing inflation in food prices and operating costs, this bill will push many owners closer than ever to shutting their doors in their communities."

The International Franchise Association also slammed the new law warning consumers can expect to pay 20% more for menu items

"By signing this bill, Gov. Newsom is siding with special interests rather than the people and small businesses of California," IFA CEO Matthew Haller said in a statement.

"This bill has been built on a lie, and now small business owners, their employees and their customers will have to pay the price," Haller said. "This bill is a fork in the eye to franchise owners and customers at a time when it hurts most."