California’s Fast-Food Workers Are Getting a Solid Raise After Tense Negotiations

Over the weekend, California’s fast-food workers and a number of big chain restaurant companies agreed to a new labor deal with the Service Employees International Union that would raise the state’s minimum wage to $20 an hour in April 2024 and form a new council of fast-food worker representatives to negotiate future pay bumps. The agreement, reported by numerous media outlets, effectively ends the referendum by fast-food companies to reverse Gov. Gavin Newsom’s worker protection law, which had proposed a $22-per-hour minimum wage. The campaign spending on that voter referendum could have reached $100 million.

The new agreement applies to fast-food companies with at least 60 stores nationwide but exempts bakeries that sell standalone bread, like Panera Bread. It’s unclear why bread-selling chains like Panera were exempted. The proposals must pass the state legislature and be signed by Newsom but given the accord from both sides, it is expected to pass. The Service Employees International Union in California said the agreement “clears a path for workers to have their victory back,” while the National Restaurant Association said it “protects local restaurant owners from significant threats that would have made it difficult to operate in California.”

While sites like Zip Recruiter show an average salary of $22 an hour fo`r fast-food workers in Los Angeles, multiple listings for restaurants like Carl’s Jr. and Del Taco currently offer starting salaries of $13 to $17, below the proposed $20 that will be mandated in April 2024. One source who declined to be named but has managed fast-food and other chain restaurants in Los Angeles said the $20-an-hour minimum could have wide effects across the local hospitality industry, including increasing the base pay for workers at non-fast-food and upscale restaurants who might see fast-food work as a viable alternative. The source also said their restaurant’s starting pay is currently over $18 per hour. The minimum wage in Los Angeles is currently $15.50 while the city of West Hollywood has a $19.08 minimum wage.

There are a few other interesting details from the fast-food labor agreement. First, local governments wouldn’t be allowed to raise the minimum wage beyond the state wage. Second, fast-food companies wouldn’t be held liable for actions done at individual restaurants. Finally, the worker council would not be able to set predictable scheduling, paid leave, or vacation — items that these groups typically negotiate for. However, SEIU California president David Huerta said the establishment of the council will give a voice to almost half a million fast-food workers while offering franchisees a seat at the table.