Newsom signs law creating council to set standards for fast food industry

Gov. Gavin Newsom signed landmark legislation Monday that will create a state council to set regulations for the fast food industry, a measure supporters say will give industry workers a voice in determining workplace standards.

Newsom’s signature on Assembly Bill 257 allows the creation of the Fast Food Council, composed of 10 members appointed by state officials that includes fast food workers, advocates, franchisees, franchisors, the Governor’s Office of Business and Economic Development and the Department of Industrial Relations.

The council would be tasked with setting minimum standards for wages, working conditions and working hours for the fast food industry. Standards set by the council would apply to fast food chains with more than 100 establishments nationwide.

“Today’s action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry,” Newsom said in a statement Monday. “I’m proud to sign this legislation on Labor Day when we pay tribute to the workers who keep our state running as we build a stronger, more inclusive economy for all Californians.”

The bill was one of hundreds of bills passed by lawmakers in the final days of the legislative session, which ended last week. Before the bill was sent to the governor’s desk, it was amended to set a $22 limit on wages promulgated by the council in 2023 and set a 2029 sunset date for the council.

The bill was propelled by a broad coalition of labor groups and advocates as it wove through the legislature, who said the bill would improve conditions for California’s more than half a million fast food workers who are often subjected to wage theft and unsafe working conditions.

“If you see me crying today it's because I'm completely filled with joy,” SEIU California Executive Director Tia Orr tweeted Monday. “550k+ fast food workers finally got their seat at the table to set their working conditions.”

The bill faced opposition from business groups and a handful of franchises across the state who argued that the bill would result in higher prices for consumers and harm business owners.

A study from the UC Riverside Center for Economic Forecasting and Development showed that the increase of food prices at limited-service restaurant chains is dependent on how much worker compensation increases. The study revealed that if worker compensation increases 60%, fast food restaurant prices could increase by up to 22%.

“By signing this bill, Gov. Newsom is siding with special interests rather than the people and small businesses of California,” International Franchise Association President and CEO Matthew Haller said in a statement Monday. “This bill has been built on a lie, and now small business owners, their employees, and their customers will have to pay the price. This bill is a fork in the eye to franchise owners and customers at a time when it hurts most.”