California Bill AB 610: Expansion of Fast-Food Wage Exemptions
A new bill introduced within the California legislature may increase the number of quick-service restaurants that would be exempted from paying fast-food workers a wage of at least $20 beginning April 1.
The businesses excused under this exemption would include restaurants in places such as airports, theme parks, hotels, casinos, theme parks, convention centers, museums, and even racetracks and sports arenas. Also exempted would be contractor-run restaurants within noncommercial settings, such as in office buildings and on state-owned beaches or other recreational facilities. Airports would also fall under this exemption, as would businesses located on land owned by a state, a city or county, or other political subdivisions of the state that are part of a port district or land managed by a port authority or port commission. Additionally, AB 610 would immediately go into effect if it is passed.
Assemblyman Chris Holden, the sponsor of the bill AB 610, did not disclose his reasons for proposing the exemptions, nor has his office responded to requests for clarification.
Impact of Proposed Wage Changes and Industry Response
At present, the only types of limited-service restaurants in California that would be exempt from the $20 an hour minimum wage are chains with fewer than 60 stores nationwide, as well as outlets that were functioning as quick-service restaurants within supermarkets, such as businesses like Panera Bread. The minimum wage for all other fast-food restaurants within the state will rise to $20 an hour at the beginning of April, under the controversial law that was passed as a compromise between California’s quick-service industry and organized labor. These new payment increases amount to a 29% rise in the minimum wage, and an estimated 500,000 fast-food workers will be entitled to this new minimum.
AB 1228, the bill in question, replaced legislation that was bitterly opposed by the restaurant industry due to the radical changes in the way quick-service employees’ wages and workplace standards were set. The responsibility for those matters would have shifted from the legislature to a Fast Food Council composed of not just fast-food employees, but union representatives, government officials, and fast-food employers. Both employees and employers would effectively have equal voting power on wage increases under the dropped bill known as the Fast Act, which would have also increased a franchisor’s liability for labor policies.
The industry has announced that it will challenge the Fast Act in a referendum vote in the November 2024 general election.
California Governor Gavin Newscom has countered this challenge by reviving what many consider to be an antiquated, long-defunct agency known as the Industrial Welfare Commission. The governor announced funds for this arrival not long after the bill was introduced, and by using the agency as leverage, Governor Gavin Newscom convinced the agency to accept the creation of the Fast Food Council, which indicated that wages could only be increased in small increments of 3%. As a result, the Fast Food Council could only recommend changes in workplace standards instead of mandating them.
Holden’s bill, which would expand the exemptions, has not yet been assigned to a committee.
