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California lawmakers pass bill to create fast food council and raise minimum wage to 20



California's estimated 500,000 fast food workers are likely days away from celebrating two wins -- a nearly $5 minimum wage raise and the creation of a first-in-the-nation council charged with setting pay and workplace standards for the entire industry.

AB 1228, authored by Assemblyman Chris Holden, D-Pasadena, sailed through its last vote in the Legislature on Thursday, and heads to Gov. Gavin Newsom. His signature is expected, following an agreement finalized last Monday between labor unions and fast food companies.

Up until then, the two groups were barreling toward a costly 2024 ballot fight that could have reached into hundreds of millions of dollars. The fast food industry has since agreed to withdraw the referendum and labor dropped its plan to hold fast food franchisors legally liable for labor violations committed by their franchisees.

"This bill shows how powerful it can be when workers, advocates, business owners and industry leaders come together to uplift the dignity of work," said Sen. Maria Elena Durazo, D-Los Angeles. "Millions of workers and their families will be uplifted."

Once signed, the legislation will result in a $20 minimum wage for all fast-food workers at chains with more than 60 locations nationwide. The pay hike is effective April 1.

Future increases would come through the new nine-member fast food council, which is charged with advancing pay and workplace standards. The council will have the power to increase that minimum wage annually by up to 3.5% or the change in the U.S. Consumer Price Index, whichever is lower, and recommend new standards.

The council, a first in America's fast-food industry, will consist of two representatives of the industry, two franchisees or restaurant owners, two employees, two advocates for employees and one neutral member of the public, who will serve as chair. It is set to hold its first meeting no later than March 1.

A Jan. 1, 2029 sunset date is included in AB 1228, meaning that the law expires then unless extended.

The showdown between labor unions and fast food companies began last year with AB 257, also known as the Fast Food Accountability and Standards Recovery Act. The law proposed a 10-member council to set pay and industry standards for employees of chains with more than 100 restaurants.

One day after Newsom signed the law, opponents launched a campaign to qualify a referendum to reverse it. What followed was a signature gathering campaign in which petitioners were accused of inaccurately representing what the law does. The referendum qualified in January, setting up voters to have the last word on the 2024 ballot.

But labor unions also responded this year with AB 1228. The measure aimed to hold companies and their franchisees jointly liable for accusations of harassment, wage theft or other forms of mistreatment. Democrats also revived the Industrial Welfare Commission, a dormant state agency with the authority to set pay and workplace standards for multiple industries, through this year's state budget.

That strategy led the sides to start working on a compromise, with the help of the governor's office. They announced an agreement last Monday.

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