California Fast-Food Wage Law on Hold Until 2024 Ballot

More than half a million Californians work in the industry and could see large wage increases.

January 30, 2023

ALEXANDRIA, Va.—A fast-food wage law in California now qualifies for a measure on the November 2024 ballot after a group of franchisee and restaurant business associations, called Save Local Restaurants, filed a petition in late December.

Save Local Restaurants submitted over 1 million signatures, well over the 623,000 signatures needed to delay Assembly Bill 257, according to the office of California Secretary of State Shirley Weber, which certified the referendum last week.

The law, known as the Fast Recovery Act, would have gone into effect on January 1, creating a government panel that would set hourly wages for fast-food workers of up to $22 beginning next year and establish workplace standards. The wages could increase annually by the same as the consumer-price index, up to a maximum of 3.5%.

Fast-food operators and franchisees say the law impacts restaurants’ ability to thrive, as restaurants will have to bear the cost of increasing workers’ pay.

McDonald’s President Joe Erlinger wrote in a statement that the bill picks “winners and losers, which is not the appropriate role of the government.”

Erlinger explained that a small business that runs two restaurants as part of a national chain, such as McDonald’s, is included under the law and could be forced to raise its minimum wage up to $22 an hour, if the panel sets it that high. However, if someone owns 20 restaurants that are not part of a large chain, the law does not apply to them. Brands with fewer than 100 locations are excluded. The law also does not apply to restaurants that bake bread.

Labor unions in the state backed the bill, saying that the government-set minimum wages would make sure that fair wages and other protections are in place for hourly workers.

In Virginia, a similar bill has been introduced that would create a council that would regulate fast-food worker wages and working conditions for any restaurant with more than 100 locations across the United States. The council would also be required to hold public hearings and certify organizations to hold biannual workers’ rights trainings.

Restaurant Dive notes that Virginia’s Republican-held House of Delegates and governor’s office makes sweeping labor laws unlikely to pass in the state, but that the effort to make these changes could continue into future legislative terms.