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California Fast-Food Workers Get Higher Wages, but Which Ones?
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By CalMatters
Published 3 weeks ago on
March 31, 2024

Fast-food workers rally at the state Capitol in Sacramento on Aug. 31, 2023. (CalMatters/Rahul Lal)

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California’s higher minimum wage for fast food workers kicks in Monday. But which restaurants have to follow the law is still a moving target.

Lynn La

CalMatters

Just this week, Gov. Gavin Newsom signed into law a carve-out for fast-food places at airports, convention centers, and hotels.

According to emails obtained by CalMatters Capitol reporter Jeanne Kuang in response to a public records request, a range of employers have been trying to figure out if they must pay $20 ever since the law was signed late last September.

Jeanne reports that in October, the Department of Industrial Relations received two inquiries from franchise owners asking whether they must comply with the law. One employer owned Auntie Anne’s and Cinnabon pretzel stores and believed they counted under a controversial bakery exemption; the other owned an ice cream parlor.

By December, employers were lawyering up. Attorneys for the Honey Baked Ham chain asked whether it would qualify. Department attorney Ehud Appel said it did not respond to individual inquiries, instead answering to the companies by putting out an 18-item FAQ this month.

Unclear How State Will Clear up the Confusion

It’s unclear how the state will handle the confusion going forward. Its FAQ directs workers who believe they’re wrongly being denied $20 an hour to file a wage theft claim with the Labor Commissioner’s Office — a process that is so backlogged amid a staffing crisis for the office that complaints can take years to resolve. The department did not immediately respond Thursday when asked for further clarification.

This week, KCRA reported that the Handel’s ice cream store owner, Gabriela Campbell, has been trying for six months to find out whether she has to pay the higher wage and claims that a government official told her that she should reach out to the Service Employee International Union, which sponsored the law, to get clarification.

Eventually, the governor’s office said it’s up to a new labor-management fast food council, the state labor commissioner and, possibly, the courts to determine which businesses have to pay the higher wage ($4 an hour more than the statewide minimum).

That’s basically what happened with bakeries after “PaneraGate” — what legislative Republicans call the questions raised about a billionaire Panera Bread franchisee’s relationship with Gov. Newsom and a possible exemption. Both Newsom and franchisee Greg Flynn denied anything untoward. At the fast food council’s first meeting this month, the state labor commission’s lawyer confirmed that bakeries that use premixed dough, including Panera, must pay $20 and that only bakeries that prepare and bake bread on-site and sell it separately may qualify for an exemption.

While many of California’s 540,000 fast-food workers will get a more livable wage, some customers will likely pay more for their burgers and burritos.

  • Joseph Bryant, SEIU’s executive vice president and a member of a new statewide fast food regulatory council, in a statement: “The vast majority of fast-food locations in California operate under the most profitable brands in the world. Those corporations need to pay their fair share… without cutting jobs or passing the cost to consumers.”

Read more about the confusion on who will get paid more in Jeanne’s story.

Also, as Jeanne has detailed, the deal that produced the wage hike is starting to unravel. Some McDonald’s franchisees created a political action committee that targeted two Democratic Assemblymembers. The PAC went one for two: Pasadena Assemblymember Chris Holden, the law’s author, finished a distant second in his run for Los Angeles County supervisor, but Kevin McCarty of Sacramento made the November runoff for mayor.

Sign up for CalMatters newsletters at this link.

About the Author

Lynn La is the WhatMatters newsletter writer. Before joining CalMatters, she developed thought leadership at an ed-tech company and was a senior editor at CNET. She also covered public health at The Sacramento Bee as a Kaiser media fellow and was an intern reporter at Capitol Weekly. She’s a graduate of UC Davis and the Columbia University Graduate School of Journalism.

About CalMatters

CalMatters is a nonprofit, nonpartisan newsroom committed to explaining California policy and politics.

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