California lawmakers approve first-in-the-nation bill to let fast food workers organize

Updated Aug. 30. Originally published Aug. 9

California’s fast food workers could get the power to collectively bargain under a bill passed by the California Legislature Monday, a measure that could drastically change the fast food and franchising industries.

AB257 would create a Fast Food Sector Council to set minimum workplace wages, hours and standards. The 10-member council would be made up of state, business and labor representatives and housed in the Department of Industrial Relations.

The bill was amended to sunset in 2029, and also caps a new minimum wage for fast food workers at $22 an hour beginning in 2023.

The bill barely passed the state Senate 21-12, with some Democrats joining Republicans in voting ‘No.’ GOP lawmakers including Senator Shannon Grove argued the bill would lead to even higher prices.

"AB257 will raise food prices for tens of thousands of establishments, ranging from yogurt shops to salad bars, burger houses and restaurants frequented by families who are struggling under record high inflation."

The bill also passed the state Assembly on a final procedural vote and now goes to Governor Gavin Newsom to sign or veto. Labor groups backed the measure, which was opposed by restaurant and business interests.

Labor advocates describe the bill’s passage as a “watershed moment” and hope it will serve as a model for organizing other low-wage sectors.

“AB 257 is one of the most important pieces of labor law to pass in generations,” said SEIU International president Mary Kay Henry at a press conference following the bill’s passage Monday afternoon. “Workers’ campaign to win a seat at the table puts every wealthy global corporations on notice: it's time for you to meet workers at the table.”

For the more than half-million fast food workers in California like Crystal Orozco, the bill would bring peace of mind that someone is fighting for their interests.

At her last job at a Jack in the Box in Folsom, Orozco said she was never afforded breaks during her graveyard shifts, since she was one of only two employees staffing the store overnight.

“Not once did I get a 30-minute or ten-minute break,” she said in an interview. “I’ve seen them straight up not pay people for hours they’d worked.”

The Carmichael resident led two strikes at the restaurant over its COVID-19 safety protocols and a broken air conditioner. She said managers threatened to call immigration authorities on a coworker who was also pushing for better working conditions.

“They want people to be blind to these laws just to make that quick buck,” Orozco said. “They can get their bonuses and we’re the ones breaking our backs for them.”

Most fast food restaurants are franchised, meaning locations are owned and operated by independent business owners, not the actual corporations whose names they carry.

Business owners sign a contract and pay certain fees to the national brand. In exchange, they get the benefit of selling well-known products – like Big Macs – and national marketing from their franchisor.

But in the debate over AB257, many franchise owners bristled at being lumped in with giant corporations and the perception that they are the ones squeezing workers while pocketing billions in revenue.

Restaurant and business groups opposed the bill, arguing it would add another layer of costs and regulation to an industry where profit margins are often razor-thin.

Leena Mann owns and operates two Sacramento-area Subways and a Del Taco with her husband and brother-in-law.

“We’re not Del Taco,” she said. “We own that flag to operate that business, but it is us behind it as small business owners that operate these businesses.”

Mann said hourly wages have increased significantly since they opened their first restaurant in 2016, when the minimum wage was $10 per hour. The family worries AB257 would add another layer of bureaucracy and make doing business even more difficult.

“If employees have any issues, they have current resources like Cal-OSHA, the Department of Industrial Relations, they also have a Labor Task Force for any issues. We are already in compliance with these agencies,” she said.

AB257 includes language that would make franchise owners and the companies they franchise from jointly liable for labor violations.

The bill’s author, Democratic Assembly Member Chris Holden, acknowledged during a committee hearing earlier this summer that many franchise owners treat their workers well.

“Those who aren’t doing the right thing aren’t going to tell their employees how to hold them accountable,” he said. “That’s why this bill is here.”

Another responsibility of the council would be to promote industry standards – or do more to make workers aware of their rights.

Holden, himself a former franchisee, says the bill would also allow business owners to file actions against agreements with companies that prevent them from meeting minimum standards for their employees.