California Opens Doors to Fast-Food Workers and Peek-a-Boo Pay Scales

Posted by: kevensteinberg
Category: Blog, Employment Law

California has taken some bold steps to protect employees in the Golden State.

Empowered Fast-Food Workers

In an overwhelming vote by the California Senate, Assembly Bill 257 was waived through to create a council to set minimum wages and working conditions for the fast-food industry across the state. Assembly Bill 257 would enact the Fast Food Accountability and Standards Recovery Act and empower a group of 10 individuals appointed by the Governor to determine how fast-food establishments should be run. While this Bill still needs to pass through the entire California Legislature and then signed by Governor Newsome, California is yet again on the forefront of establishing a land of opportunity for employees.

Under the current version of the Bill, the industry-wide minimum wage will be capped at $22 an hour in 2023, a raise of almost $7.00 an hour (or the current price of a gallon of gasoline in California).

According to the Economic Research Institute, the average pay for a Fast Food Worker is $27,373 a year and $13 an hour in California, United States. The average salary range for a Fast Food Worker is between $21,707 and $30,795. On average, a High School Degree is the highest level of education for a Fast Food Worker.

As stated by the Bill’s authors Assembly members Chris Holden, Wendy Carrillo, Evan Low and Luz Rivas:
“A.B. 257 creates minimum standards for wages and work conditions, protects workers from being fired for organizing and establishes sectoral organizing with a fast food worker council,” Holden said in a SEIU California statement Monday. “I’m proud to have ushered an inclusive approach to the industry by giving employees the chance to be included in a process that has always impacted them.”

This Bill is the first in the nation seeking a full review every three years of restaurant health safety, employment standards and establishing a statewide minimum wage and employment standards.

Proponents of the Bill argue that the billion-dollar fast-food corporations did not keep California’s half-million fast-food workers safe which resulted in issues of wage theft, sexual harassment and safety concerns

Opponents of the Bill argue that the Bill is premised on faulty assumptions about the fast-food industry and would provide too much power and authority to an unelected council, with perhaps little or no industry related experience. They also claim the Bill would create great imbalance in the franchisor and franchisee model and in application make franchisees managers rather than business owners and would drive up the cost of food for Californians.

The International Franchise Association (IFA), a trade group for the franchise community, slammed the changes as “lipstick on a pig.” The IFA cites research that found the act could drive up menu prices by as much as 40% and result in a 20% jump  in food prices overall.

A major opponent of the Bill of the Golden State, is the President of the Golden Arches, Joe Erlinger, president of McDonald’s U.S. Mr. Erlinger, one of the significant players in the fast food industry has taken quickly not only to delivering meals at a fast pace, but to strike hard at the California Legislature.

“It imposes higher costs on one type of restaurant, while sparing another. That’s true even if those two restaurants have the same revenues and the same number of employees,” Erlinger wrote in a letter posted to the company’s site Wednesday. “Aggressive wage increases are not bad. … But if it’s essential to increase restaurant wages and protect their welfare – and it is – shouldn’t all restaurant workers benefit?” Erlinger wrote.

In 2019, McDonald’s told the National Restaurant Association it would no longer oppose federal, state or local minimum wage hikes. Other restaurant companies have been fighting the bill as well, including Chipotle Mexican Grill, Chick-fil-A, Yum Brands and Restaurant Brands International.

Peek-A-Boo Pay Scales

Ready or not, California employers may soon be required to include pay scales in their job listings and provide detailed pay data reports. Senate Bill 1162 would require these data reports to include the median and mean hourly rate for each combination of race, ethnicity and sex within each job category and also mandates that employers submit a separate pay data report for employees hired through labor contractors.

While such are requirements now for employers with at least 100 employees, this Bill would require such compliance by employers with more than 15 employees. California Senator Monique Limón stated that she is “proud of our efforts to put forth legislation that will help bring about a more equitable workforce — one that supports all families, women, and people of color.” On Twitter @MoniqueLimonCA tweeted, “It’s time to finally close the #WageGap!”

Transparency of pay initiatives are being presented across the nation with measures either proposed or enacted in a dozen states including New York, Ohio, Nevada and Washington. And states are tackling pay disparities in a number of different ways. Stay tuned for what transpires with Governor Newsom when each of these Bills cross his desk.

Steinberg Law provides valuable insight, expertise and knowledge to employers and business owners across a wide spectrum of areas and is frequently requested and tasked with protecting and defending a wide spectrum of employers and businesses.

Author: kevensteinberg