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$22 an hour? New California fast-food wage law worries restaurateurs

International Franchise Association warns law will raise menu prices 20%.

Published: September 5, 2022 8:48pm

Updated: September 5, 2022 9:44pm

Once the rallying cry of organized labor, $15 an hour is now a thing of the past for more than half a million employees in the Golden State.

California Gov. Gavin Newsom (D) signed a bill into law Monday that could raise the state minimum wage for fast-food workers to $22 next year, UPI News reports.

AB 257 creates a "Fast Food Council" of 10 members, jointly appointed by the governor and legislative leaders, that will establish "sector-wide minimum standards" for wages, working conditions and working hours at all restaurant chains with 100 or more locations nationwide. The council can set wages up to $22 in 2023 and raise them each year up to 3.5% depending on the Consumer Price Index.

Advocacy groups Fight for $15 and the Service Employees International Union celebrated Newsom's Labor Day signing, UPI said. Restaurant Business claims the law will affect about 150 companies and 19,000 locations, and the National Restaurant Association (NRA) expects other West Coast states, New York and Illinois to pass similar laws.

The International Franchise Association claims the new law will raise prices for consumers by 20%. "At a time when California restaurants are struggling with skyrocketing inflation in food prices and operating costs, this bill will push many owners closer than ever to shutting their doors in their communities," NRA executive vice president Sean Kennedy said.

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