A California law stripping fast-food chefs of the power to set wages sparks a struggle

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LOS ANGELES — A unique California law giving an unelected council unprecedented power over wages and working conditions at fast-food restaurants is sparking a furious backlash, with wealthy business and restaurant groups attacking the state’s powerful unions in an attempt to control it to knock over.

Unions are preparing to hit back, calling the new law the biggest victory for organized labor in a generation and vowing to do whatever it takes to protect it. “This is a turning point in the history of the labor movement,” said Mary Kay Henry, president of the Service Employees International Union.

But the measure has drawn backlash from national business groups, including the US Chamber of Commerce, who are calling for the law to be repealed. The groups have watched with suspicion as California has enacted a series of new worker protections in recent years and established itself as a national model. Opponents and outside pundits are already predicting that other Democrat-controlled states may try to follow California’s fast-food board example, fueling the escalating struggle for workers’ rights nationally.

“We’re seeing a tremendous surge in organizing efforts from workers across the country, and I think this is another way workers can speak out and be directly involved in raising standards in the industry,” said Christina Chung, executive director of the Center for Law and work at UC Berkeley Law School. “It’s really exciting and I think other states will follow suit.”

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The California measure would effectively flip the power structure between workers and their bosses, allowing wages to be set by a 10-member council made up of fast-food workers, restaurant owners and others, most of whom be chosen by the Democratic governor. The council would be empowered to enact sweeping changes, including raising the California minimum wage from $15 an hour to as much as $22 an hour for hundreds of thousands of mostly non-union workers statewide.

Although Gov. Gavin Newsom (D) has already signed the law into law, the law will be suspended if opponents – as expected – gather enough signatures to get a proposal repealing it in the 2024 vote.

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The developments come as the pandemic, combined with inflation, has forced workers, employers and policymakers to reconsider the employment landscape across the country in multiple ways. Along with several other states, California also passed a sweeping pay transparency law that will go into effect next year, requiring employers to include salary ranges in job advertisements and — for companies with 100 or more employees — also to report average salaries by race and gender. Fast-food legislation could be California’s most groundbreaking move yet.

At the same time, Congress was unable to pass the union’s top priority bill — a bill called the Pro Act that would protect unionization — and with Republicans poised to regain control of the House of Representatives, the door is swinging open slammed Capitol Hill every pro-labor bill for at least the next two years. That means unions have nowhere else to look but to fellow state legislators or local governments if they want to advance their agenda.

The council, created by the Fast Food Accountability and Standards Recovery Act, or Fast Recovery Act, which Newsom signed into law on Labor Day, would have the power to legislate new rules on wages, working conditions, safety standards and other issues at thousands of fast-food restaurants to enact restaurants in California. The council would include representatives from business groups and restaurant owners, as well as trade unions and individual workers. But because all members would be appointed by the governor or Democrat lawmakers, business groups believe it would end up stamping union demands.

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Even more important would be the council, according to supporters and opponents of the law a dramatic departure from how wages and working conditions are currently set in this country. Typically, unionized workforces work under contracts negotiated between unions and management, while in non-unionized workplaces, managers simply call the shots.

California law introduces an entirely new system, similar to some European countries, with a government-appointed council making binding decisions on many key issues. Advocates and some outside observers say such a system is badly needed, especially after the pandemic uncovered dangerous working conditions at some fast-food outlets, where workers have in some cases been forced to come to work sick or without proper protective equipment .

“This has always been the next step in the minds of workers and it is how we will win the union part of our journey and create an enduring organization where we can address sexual harassment, wage theft, burns on our arms and the lack of training and mobility” , said Mary Kay Henry of the SEIU.

She said the change needed could not happen “if we tried a very traditional way of organizing that we saw as incorporating outdated, racist and sexist labor laws, where we went shop by shop and tried to get involved to negotiate with a franchisee who doesn’t really have the power to raise wages or change conditions because the economic decisions are made in the multinationals’ home offices.”

Business groups deny claims of rampant labor rights violations, citing an industry-sponsored study purporting to show that the fast-food industry is no worse than other industries and better than many when it comes to wage theft and labor law violations . They argue that the council is actually a backdoor attempt by organized labor to enforce union contracts in an industry they have largely failed to organize. They warn of a rise in food prices of up to 20 percent should the law go into effect – a number union-aligned academics are squabbling over – and fewer jobs for California workers, as potential store franchise owners conclude that they can no longer do business in the state.

“This is really about unions trying to gain market share in the restaurant industry,” said Matthew Haller, president and chief executive officer of the International Franchise Association, adding that “the premise on which the law is built does not stand up facts.”

“We didn’t delve into facts, we delved into politics, and of course the unions have a lot of friends in California, and ultimately a lot of people take orders from them without necessarily listening to the ramifications of what that’s going to do.” for food prices and the opportunity for franchisors to do business in California, Haller said.

Opponents, who have already spent millions defying the law, say they are on track to collect the required 623,212 signatures, which they must submit by December 5 to submit a proposal in the next statewide vote to get the legislation repealed.

Supporters don’t wait to fight. On Tuesday, fast food workers and supporters Nationwide, the SEIU organized demonstrations in front of fast-food restaurants to protest their opponents’ efforts to overturn the new law and raise awareness of their cause.

“I don’t think it’s fair” for business groups to try to repeal the law, said Maria Bernal, 43, who has worked at Jack in the Box in Sacramento for 10 years and attended Tuesday’s protests. The introduction of the law is “an emergency,” she said.

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