Silicon Valley fast-food industry finds compromise in state bill

Flipping burgers, assembling sandwiches and scooping guacamole onto salads is going to look tastier to San Jose’s fast-food workers after unions and restaurant owners reached an agreement through a state bill heading to Gov. Gavin Newsom’s desk.

State legislators passed Assembly Bill 1228 last week, ending a stalemate over fast-food labor policies, which triggered a lawsuit and referendum for the March 2024 ballot. Under AB 1228, fast-food worker wages increase to $20 per hour starting in April and a nine-member Fast Food Council will be created to monitor the industry. This is predicated on the referendum being pulled from the ballot and last year’s bill being repealed. It also involves SEIU withdrawing a bill that makes fast-food franchisors legally liable when their franchisees commit labor violations.

This deal repeals Assembly Bill 257, otherwise known as the FAST Recovery Act. The bill would have established a 10-person council and set the minimum hourly wage to $22 starting this year, but it was stopped by a lawsuit filed by Save Local Restaurants, a coalition whose members include the International Franchise Association and the National Restaurant Association. Franchisees claimed the increased pay and extra regulatory burdens of the council would make it hard to stay in business. The coalition submitted a referendum with more than 1 million signatures to repeal AB 257.

Laura Reyes, who works at a Burger King in San Jose, said through a Spanish translator that the increase in wages will help employers provide for their families.

“Now that we have a seat at the table, I think management will think twice,” Reyes told San José Spotlight.

Reyes recounted a day at work when she felt extreme pain during her shift. Her coworker suggested she may be experiencing a miscarriage, since Reyes suspected she was pregnant. But Reyes said her manager didn’t allow her to leave, and she didn’t know she had the right to do so. She was hospitalized after her shift and discovered she had a miscarriage.

Alex Johnson, a franchisee for Auntie Anne’s and Cinnabon in Milpitas, called the deal the “best alternative” in a statement from the International Franchise Association.

“It protects the franchise model and our restaurants while giving workers meaningful wage increases to workers on a predictable timeline,” Johnson said. “It eliminates threats and regulatory burdens that would have hampered our ability to run our restaurants as independent small business owners.”

Ruth Silver Taube, a worker’s rights attorney and San José Spotlight columnist, said this bill will still protect fast-food employees by addressing wage theft, violence and safety issues in the workplace.

“I’m really glad (the referendum) went away and that they’ve been able to work out something that I believe is really going to help workers,” Silver Taube told San José Spotlight.

Newsom has until Oct. 14 to sign the bill. If signed, it will take effect Jan. 1, 2024 and sunset in 2029.

Contact B. Sakura Cannestra at [email protected] or follow @SakuCannestra on Twitter.