SACRAMENTO (AP) - A new California law aimed at boosting the salaries of fast food workers was delayed by nearly two years due to industry opposition. The Democrats in the state Legislature may have found a way to increase worker salaries anyway.
Gavin Newsom signed it last year. The law created a council of 10 members with the power, among others, to raise the $15.50 state minimum wage for fast food workers to a maximum rate of $22 an hour. Experts hailed it as one of the most significant pieces of employment law passed in the last generation.
California voters, unlike most other states, have the ability to reverse some of the laws passed by the Legislature. Business groups that opposed the law collected enough signatures for a 2024 referendum. The law is not in effect until 2024.
Business groups believed that the law would be defeated at the polls. California's $300 billion operating budget contains a provision that resurrects a dormant regulatory council with powers similar to those of the fast-food council.
In California, the Industrial Welfare Commission regulates wage rates, working hours and conditions. Since then, the commission hasn't issued any orders.
California's budget is set to be voted this week and includes $3 million for the commission to get back on track. The commission can investigate the wages paid in various sectors. It can convene wage boards for each industry to collect information and make recommendations if it determines that wages are not adequate to cover the cost of living. The commission may then issue specific orders regarding wages, working hours and conditions.
Conditions would be attached to the funding. The commission would have to give priority to industries where more than 10% of the workers fall below or at the federal poverty line, which includes California's fast-food workers.
The commission was also told to finish its work before the end of 2024, just days before the scheduled vote by voters on the law. This funding was included in a budget bill and could not be blocked.
Matt Haller is the president of the International Franchise Association. He believes that the Legislature has tried to circumvent the efforts made by the industry to stop the legislation creating the Fast Food Council.
Haller, who noted that over a million Californians signed a petition opposing the law, said: 'We are concerned about any attempts to create a Frankenstein version'. It speaks to the desire of (labor unions) to gain political control over our model.
Maria Elena Durazo is a Democrat state senator from Los Angeles, and the chair of the subcommittee for labor matters. She said that lawmakers are not targeting the fast-food industry by restoring funding to the commission. She stated that lawmakers are trying to improve the conditions of all California workers. According to a United Ways of California report, more than a third of Californians don't earn enough to cover their basic needs.
Durazo added that the commission should always look at the wages of workers.
She said, 'There will come a point when they have to step up and take action. We're giving them funding because the problem is much larger.
Last year, the Service Employees International Union (SEIU) sponsored the Fast Food Law. David Huerta is the president of SEIU California, and SEIU-United Service Workers West. He did not comment if the union had pursued funding to achieve the goals of fast food law. He said that the funding was part of the 'workers from low-wage industry... rising up and demanding the wages they need for their families'
Huerta stated that SEIU members thanked Governor Newsom for listening to workers, and taking bold actions to combat the growing tide of poverty and inequality experienced by low-wage employees and people of colour.
California's fiscal year starts on Saturday. On Tuesday, Newsom and legislative leadership were still in the midst of negotiating a budget for operating expenses. Both sides were tentatively in agreement on the restoration of funding for the Industrial Welfare Commission. The language was added to a budget bill at the weekend. Newsom's Office declined to comment on Monday about restoring funding for this commission.
Despite not having money to run, the Industrial Welfare Commission continues to exist. According to a legal analysis, it still has 17 wage orders in place, which include a minimum wage, and other factors, for the manufacturing, agriculture, and housekeeping sectors.
The Industrial Welfare Commission, if it becomes law, could have a wide range of impacts. Many business groups are against the Industrial Welfare Commission, including the California Chamber of Commerce and the California Manufacturers and Technology Association.
These groups are particularly unhappy that the Legislature wants to limit the Industrial Welfare Commission's ability to issue 'any standards which are less protective than the existing state laws'
In a press release, the business groups stated that 'this limitation will only cause unnecessary confusion'.