Please ensure Javascript is enabled for purposes of website accessibility
Would Fast-Food Law Improve Worker Safety? CA Legislators Want to Change the Rules
gvw_edward_smith
By Edward Smith
Published 10 months ago on
June 20, 2023

Share

California legislators are working to change the fast-food business model to protect workers’ rights. Opponents say it will make becoming a business owner much harder.

And while business owners say the bill that just passed the California Assembly will not provide any extra protection for workers, they also say the union push this time around may get the bill across the finish line.

Of the 3.58 million fast-food workers in the U.S., 73% work in a franchise, according to California Assembly analysis. Franchise owners license with a larger company to use a business name and a menu to share in the company’s larger branding.

Holden: Franchise Model Pressures Owners to Cut Corners

Assembly Bill 1228 would make fast-food franchisors with more than 100 locations nationally share legal liability for paycheck violations, worker safety complaints, and class-action lawsuits.

Laws making franchisors culpable for labor violations for a franchise’s employees are commonly called joint employer.

“This bill is aimed at protecting workers and supporting local businesses by ending corporations’ ability to exploit the franchise system,” said Assemblymember Chris Holden (D-Pasadena), the bill’s author.

More than half of fast-food workers have experienced wage theft whether it be getting paid late, not getting paid overtime rates, denied meal breaks or reimbursement for uniforms, according to a report from the UCLA Labor Center.

Holden said maintaining a safe and healthy environment puts pressure on franchisees because “global corporations refuse to contribute their share.”

“Pressure from corporations to cut costs and keep profits high creates environments ripe for exploitation, abuse, and rampant violations of employment laws,” Holden said.

Business Owners: Joint Employer Laws Keep Many from Business Ownership

Making franchisors liable for workers upends the business model and takes control away from small business owners, say business advocates that include the California Chamber of Commerce and International Franchise Association.

“The supporters of the bill fail to understand the Franchising Business Model,” said Ali Nekumanesh in an email. Nekumanesh is an executive vice president with Deli Delicious Franchising.

The franchising model makes small business ownership possible for a lot of people who otherwise can’t afford to start one, Nekumanesh said. There is not as much risk opening a restaurant with a recognizable name.

Under the model, franchisees control hiring, training, and all working conditions.

If that model were to change, franchisors would look to mitigate financial exposure wherever possible, Nekumanesh said. They would likely make qualifying standards much higher and much more expensive.

“As you can imagine, this would have a detrimental and unrealized impact on the segment of our society who has limited financial and other resources,” Nekumanesh said.

Fast-Food Corporations Absolve Themselves from Labor Liabilities

Fast-food corporations control many aspects of restaurant operations, according to the Service Employee International Union’s support letter in the Assembly analysis.

Requests for comment from SEIU were not returned to GV Wire before this story’s publication.

McDonald’s and Burger King’s rules extend so far as to the speed of orders, lettuce on hamburgers, and “even whether workers smile and make eye contract with guests,” writes SEIU and the Fight for 15 in the support letter for AB 1228.

“However, when it comes to responsibility for issues endemic to the fast-food industry (wage theft, violence, harassment, discrimination, and other violations of employment law), small business franchisees and frontline workers are left to fend for themselves,” the letter stated.

Joint Employer Does Not Protect Workers, Say Business Advocates

Business advocates dispute claims that fast-food restaurants are responsible for such a high share of labor violations.

Fast-food franchisees are responsible for .66% of wage claims in California, despite making up 1.7% of employment, according to a May analysis by the Employment Policies Institute.

Lawsuits against fast-food employers filed under the Private Attorneys General Act — a legal avenue designed to make filing employer lawsuits easier — made up only 1.5% of lawsuits where awards were granted to employees and 1.8% of money granted to employees.

Nekumanesh said labor would be better served by better funding enforcement from state agencies that already exist.

Data analyzed comes from the California Division of Labor Standards, U.S. Census Bureau, and U.S. Bureau of Labor Statistics. (Source: Employment Policies Institute)

AB 1228 Is One More Bill Changing Fast-Food Employment Laws

The California Assembly approved the bill on May 31. Senate Legislative, Public Employment & Retirement, and Judicial committees are currently reviewing the bill.

Laws targeting restaurants are nothing new. In September, legislators approved AB 257, which creates a Fast-Food Council to determine minimum standards on wages, working hours, and other working conditions for fast-food workers.

Opponents to the bill said the 10-member council could unilaterally set minimum wage laws, going as high as $22 an hour.

In January, a group called Save Local Restaurants successfully petitioned to have a proposition put on the 2024 ballot to repeal the law. The qualification for the ballot suspends implementation of AB 257 until then.

Definitions of “joint employer” bounce back and forth depending on administrations. In 2020, the definition under the National Labor Relations Board was limited to those with direct control over employee matters. A proposed change in September 2022 from the NLRB would loosen that definition.

Nekumanesh says each time joint employer comes up it gains momentum. While this law is limited to chains with 100 stores, he believes it will be extended soon to those including two or three units.

“A great number of the owners are employees who have worked hard, rose through the ranks, and became owners or partners in the businesses,” Nekumanesh said.

RELATED TOPICS:

DON'T MISS

Dem House Challengers Salas, Gray Flex Fundraising Muscle

DON'T MISS

Career-High Strike Outs for Ryan Weathers as Marlins Best Giants 6-3

DON'T MISS

LeBron’s Lakers Top Pelicans in Play-in, Set up Playoff Rematch With Nuggets

DON'T MISS

Storm Dumps Record Rain and Floods Dubai’s Airport

DON'T MISS

Mookie Betts Matches Career Best with 5 Hits in Dodgers’ 6-2 Victory Over Nationals

DON'T MISS

Klay Thompson Misses All 10 Shots in Potential Last Game With the Warriors

DON'T MISS

NBA Bans Jontay Porter for Life After Probe Shows He Bet on Games

DON'T MISS

Carbon Capture Isn’t Nearly as ‘Green’ as Fossil Fuel Promoters Make It Sound

DON'T MISS

Southern California City Council Gives Key Approval for Disneyland Expansion Plan

DON'T MISS

Tesla Wants Shareholders to Reinstate CEO Elon Musk’s $56 Billion Pay Package

UP NEXT

Career-High Strike Outs for Ryan Weathers as Marlins Best Giants 6-3

UP NEXT

LeBron’s Lakers Top Pelicans in Play-in, Set up Playoff Rematch With Nuggets

UP NEXT

Storm Dumps Record Rain and Floods Dubai’s Airport

UP NEXT

Mookie Betts Matches Career Best with 5 Hits in Dodgers’ 6-2 Victory Over Nationals

UP NEXT

Klay Thompson Misses All 10 Shots in Potential Last Game With the Warriors

UP NEXT

NBA Bans Jontay Porter for Life After Probe Shows He Bet on Games

UP NEXT

Carbon Capture Isn’t Nearly as ‘Green’ as Fossil Fuel Promoters Make It Sound

UP NEXT

Southern California City Council Gives Key Approval for Disneyland Expansion Plan

UP NEXT

Tesla Wants Shareholders to Reinstate CEO Elon Musk’s $56 Billion Pay Package

UP NEXT

Myanmar’s Ousted Leader Suu Kyi Moved From Prison to House Arrest Due to Heat, Military Says

Edward Smith,
Multimedia Journalist
Edward Smith began reporting for GV Wire in May 2023. His reporting career began at Fresno City College, graduating with an associate degree in journalism. After leaving school he spent the next six years with The Business Journal, doing research for the publication as well as covering the restaurant industry. Soon after, he took on real estate and agriculture beats, winning multiple awards at the local, state and national level. You can contact Edward at 559-440-8372 or at Edward.Smith@gvwire.com.

Storm Dumps Record Rain and Floods Dubai’s Airport

51 mins ago

Mookie Betts Matches Career Best with 5 Hits in Dodgers’ 6-2 Victory Over Nationals

55 mins ago

Klay Thompson Misses All 10 Shots in Potential Last Game With the Warriors

58 mins ago

NBA Bans Jontay Porter for Life After Probe Shows He Bet on Games

1 hour ago

Carbon Capture Isn’t Nearly as ‘Green’ as Fossil Fuel Promoters Make It Sound

2 hours ago

Southern California City Council Gives Key Approval for Disneyland Expansion Plan

2 hours ago

Tesla Wants Shareholders to Reinstate CEO Elon Musk’s $56 Billion Pay Package

2 hours ago

Myanmar’s Ousted Leader Suu Kyi Moved From Prison to House Arrest Due to Heat, Military Says

2 hours ago

Vital Climate Tool or License to Pollute? The Battle Over CA’s First Carbon Capture Project

2 hours ago

Boeing in the Spotlight as Congress Calls a Whistleblower to Testify About Defects in Planes

3 hours ago

Dem House Challengers Salas, Gray Flex Fundraising Muscle

Rudy Salas and Adam Gray have lots to brag about with the latest fundraising tallies for congressional candidates. Both are former Democrati...

19 mins ago

19 mins ago

Dem House Challengers Salas, Gray Flex Fundraising Muscle

23 mins ago

Career-High Strike Outs for Ryan Weathers as Marlins Best Giants 6-3

29 mins ago

LeBron’s Lakers Top Pelicans in Play-in, Set up Playoff Rematch With Nuggets

51 mins ago

Storm Dumps Record Rain and Floods Dubai’s Airport

55 mins ago

Mookie Betts Matches Career Best with 5 Hits in Dodgers’ 6-2 Victory Over Nationals

58 mins ago

Klay Thompson Misses All 10 Shots in Potential Last Game With the Warriors

1 hour ago

NBA Bans Jontay Porter for Life After Probe Shows He Bet on Games

2 hours ago

Carbon Capture Isn’t Nearly as ‘Green’ as Fossil Fuel Promoters Make It Sound

MENU

CONNECT WITH US

Search

Send this to a friend