Fast food workers and restaurant groups spar over labor bill

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FILE – This June 25, 2019 file photo shows the sign outside a McDonald’s restaurant in Pittsburgh. (AP Photo/Gene J. Puskar, file)

(NewsNation) — More than half a million fast food workers in California could receive more power and protections thanks to a bill that passed the state legislature Monday, but restaurant owners and industry groups warn it will do more harm than good.

The measure, known as the FAST Recovery Act, would create a new 10-member fast food council composed of workers’ delegates, employers’ representatives and state officials appointed by the governor and legislative leaders that would negotiate wage and labor standards for the industry.

If approved, the law would allow the council to raise the minimum wage for fast food workers in the state up to $22 an hour as soon as next year. That hike would be 40% higher than the statewide minimum wage, which is set to increase to $15.50 an hour on Jan. 1.

‘historic victory’ for workers

Labor unions and worker advocates celebrated the first-of-its-kind bill, which enables fast food employees to more effectively negotiate as a sector, rather than on a store-by-store basis.

The Service Employees International Union (SEIU), which represents nearly two million workers nationwide, called Monday’s passage a “historic victory” and said it will “help set minimum industry standards around wages, safety and training,” in a statement.

The council could help give a voice to fast food workers like Evelyn Barillas, 38, who said she’s experienced wage theft and sexual harassment during her 20 years in the industry.

“There was never anybody to speak up for us,” said Barillas, a single mother of four, who told NewsNation her hours were cut after she refused to go out with her manager.

After seeking legal help, Barillas realized she didn’t have the time or resources to move forward and had to get two additional jobs to make up for the hours she’d lost.

The SEIU says California fast-food workers have waged more than 400 strikes and filed nearly “300 safety and wage complaints with local and state agencies” from the height of the pandemic in March 2020 to now.

In addition to creating a statewide council, the new law would allow jurisdictions with more than 200,000 people to establish their own local councils to advise the state body on further regulations.

Burden on franchise owners

The FAST Recovery Act has drawn strong opposition from numerous restaurant groups, franchisees and industry experts who say it will lead to higher prices, hurt small business owners and discourage entrepreneurship.

Under the new law, only fast-food brands with more than 100 locations nationwide would fall under the council’s jurisdiction. Industry leaders say that provision unfairly targets franchisees of larger chains.

“If you are a small business owner running two restaurants that are part of a national chain, like McDonald’s, you can be targeted by the bill. But if you own 20 restaurants that are not part of a large chain, the bill does not apply to you,” Joe Erlinger, the president of McDonald’s USA said in a statement Wednesday.

According to the International Franchise Association (IFA), an industry trade group that opposes the bill, 70% of the more than 16,000 California franchises that would be impacted are owned by single-unit operators.

“This is painted as going after McDonald’s, or Wendy’s or Burger King, when in reality, the local McDonald’s, local Wendy’s and local Burger King are all, in fact, owned by individual business people in California,” said Jeff Hanscom, the VP of state and local government relations for the IFA.

Hanscom pushed back against the notion that fast food workers face labor violations at disproportionately high rates.

A recent analysis of state labor violations data by the Employment Policies Institute, a fiscally conservative think tank, also cast doubt on that assertion.

“Across all years of data analyzed, there was roughly one wage claim per one-thousand private sector employees in limited service — one of the lowest per-employee industry rates,” the report determined.

SEIU’s own survey of fast food workers suggests violations like wage theft may be significantly underreported.

One thing is almost certain: a 40% increase in labor costs would lead to a rise in prices at fast food restaurants across the state. Hanscom said the majority of that burden would fall on those who are least able to bear it — people who rely on quick service restaurants as affordable food options.

what’s next?

The legislation comes at an important time for the broader labor movement which has seen American support for unions rise to 71% in the latest Gallup polling. As recently as 2009, less than half of Americans said they approved of labor unions.

Now the bill heads to California Gov. Gavin Newsom’s desk who has until the end of the month to sign it.

It’s unclear where the governor stands, although 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 lead to a “fragmented regulatory and legal environment” for employers.

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