Fast Food Industry Shocker: California’s Truce That No One Expected…

Fast Food Industry Shocker: California's Truce That No One Expected

An agreement on worker laws has been reached between fast food companies and labour unions in California, ending a protracted power battle and averting a potential ballot war.

Through this agreement, the workforce regulator that California lawmakers established last year with the authority to determine pay and labour standards for the half a million people working for major companies like McDonald’s would remain in place until 2029. The minimum wage will increase to $20 per hour by 2024, but municipalities would be prevented from paying more.

The proposed deal would resolve a significant stumbling block in discussions by exempting franchise firms from liability for worker infractions at individual restaurants. Predictable scheduling, paid leave, and vacation time are longstanding union demands that the council would be barred from addressing. All of that shifting depends on a referendum being withdrawn that challenges the law.

As the end of the legislative session drew near, talks came down to the wire, and on Monday, language reflecting those revisions was published with the help of Gov. Gavin Newsom’s office as a mediator.

“AB 1228 clears the path for fast food workers to start making much-needed improvements to the policies that affect their own workplaces and lives,” said SEIU California President David Huerta in a statement. More than half a million fast food workers in our state will have a stronger say thanks to this bill, and franchisees will be afforded the same rights as employees, advocates, franchisors, and the state itself. In order to combat poverty and injustice, we strongly urge the legislature to approve AB 1228.

President and CEO of the International Franchise Association Matt Haller issued a statement saying that the agreement “protects the franchise business model” and prevents “more significant — and potentially existential — threats, costs, and regulatory burdens targeting local restaurants in California.”

The agreement is the culmination of unions’ years-long political campaign in California to organise fast food employees. Ten years after New York’s “Fight for 15 and a Union” began with an emphasis on franchises, salary increases have been achieved in California and other states, but unions have still been unable to secure collective bargaining rights.

When the Service Employees International Union (SEIU) of California successfully lobbied for a law to establish an industry regulator in Sacramento last year, they accomplished a form of sectoral bargaining, a method of organising that is more popular in Europe.

A frantic game of cat and mouse ensued. In a flash, fast food firms qualified a referendum that will delay the law until the next general election, in 2024. In response, SEIU is advocating for legislation that would reinstate a part of last year’s law that would impose shared liability on franchise chains but was removed in an unsuccessful attempt to appease industry opposition. The union was also successful in sneaking money into the state budget for a now-defunct wage regulator that might have mandated pay raises.

Meanwhile, the business has spent millions to stop the liability law and $50 million on its referendum campaign, setting the stage for a rough election season. Since the summer, when negotiations began, the liability measure has been sitting in committee.

Assemblyman Chris Holden (D-Pasadena) indicated in August that the conditions for a compromise were established by the looming ballot fight and the subsequent bill.

“I think having that positioned to be on the ballot for a vote at the end of next year, and then having joint liability in a bill that was moving the Legislature, became a motivation for all parties to sit down and have an honest conversation,” Holden said in an interview.

On Friday, Newsom signed a law pushed by the Service Employees International Union (SEIU) to crack down on what the union called industry abuses of the referendum process, paving the door for a settlement to be reached.

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