California governor signs landmark law for fast food workers

Business

(NewsNation) — California Gov. Gavin Newsom on Monday signed a first-of-its-kind bill giving more than a half-million fast food workers more power and protections, despite the objections of restaurant owners who warned it would drive up consumers’ costs.

The landmark law creates a 10-member Fast Food Council with equal numbers of workers’ delegates and employers’ representatives, along with two state officials, empowered to set minimum standards for wages, hours and working conditions in California.

Newsom said he was proud to sign the measure into law on Labor Day.

“California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state’s prosperity,” he said in a statement. “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.”

The governor’s signature comes just months after his Department of Finance opposed a June version of the bill, saying it would create “significant ongoing costs” at the Department of Industrial Relations and lead to a “fragmented regulatory and legal environment” for employers.

The law caps minimum wage increases for fast food workers at chains with more than 100 restaurants nationwide at $22 an hour next year, compared to the statewide minimum of $15.50 an hour, with cost of living increases thereafter.

The state legislature approved the measure on Aug. 29. Debate split along party lines, with Republicans opposed.

Sen. Brian Dahle, the Republican nominee for governor in November, had called it “a steppingstone to unionize all these workers.”

Supporters had said they hoped the measure would inspire similar efforts elsewhere.

Industry groups who opposed the bill were quick to criticize the governor’s decision amid concerns that the new law will raise restaurant prices, hurt franchisees and discourage entrepreneurship.

“By signing this bill, Gov. Newsom is siding with special interests rather than the people and small businesses of California,” Matthew Haller, the President and CEO of the International Franchise Association, 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.”

According to the IFA, more than 70% of the 16,000 California franchises that would be impacted are owned by single-unit operators.

Restaurant owners and franchisers cited an analysis they commissioned by the UC Riverside Center for Economic Forecast and Development saying that the legislation would increase consumers’ costs.

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