In September 2023, California Governor Gavin Newsom signed two union-backed bills that boosted fast-food and health care workers’ minimum wages.
California-based fast-food workers for chains with 60 or more locations around the nation will earn at least $20 an hour beginning April 1, 2024, $4 higher than the overall state minimum wage of $16 that became effective January 1, 2024.
In June 2024, health care workers will earn a minimum of $18, $21 or $23 an hour, depending on what type of facility employs them and where they work.
While the $20 an hour minimum wage for fast-food workers was implemented on April 1, 2024, the June 1, 2024 implementation date for minimum hourly wages for health care workers was delayed by Governor Newsom due to state budget concerns. The law was expected to cost the state $1.4 billion in the first six months of implementation, according to estimates by the Department of Finance. The deal Newsom struck with lawmakers to postpone the wage increase had an uncertain start date. It stipulated the raises could begin sometime between Oct. 15 and Jan. 1. The roll out date depended on the state bringing in at least 3% more tax revenue than the administration expected, or the state starting to collect data to secure federal funding that will help offset some of the costs related to the law.
CURRENT STATUS
10/1/2024 A minimum wage increase for California health care workers is finally kicking in
IN SUMMARY
A California minimum wage law that was delayed amid budget troubles is now set to go into effect Oct. 16, 2024. It’s expected to benefit hundreds of thousands of workers.
(snip)
As designed, the minimum wage increase isn’t supposed to come all at once. Workers will reach the $25 hourly pay rate over a number of years, and some sooner than others, depending on the type of facility they work in.
For example, workers at large hospital systems will see a boost to $23 an hour. But workers at rural and so-called safety net hospitals will start at $18. The Department of Industrial Relations lists the wage schedule for each employer type covered by the law. Some workers will not reach $25 until 2033.
For those interested, the State of California Department of Industrial Relations provides a detailed website for the Health Care Worker Minimum Wage Frequently Asked Questions that TMF cannot access. Go to the CalMatters website above and click “lists the wage schedule for each employer type" highlighted in the article.
Approximately 426,000 workers are expected to benefit from the law, according to estimates from the UC Berkeley Labor Center. This includes medical assistants, front office staff, medical billing personnel, patient techs, janitors, food service workers, among others.
Newsom’s minimum wage hike for health workers is the state’s second for a specific industry.
I don’t fully understand how this is legal. Different laws for different people? (Different than a union negotiating for things, or perhaps even for different industries. But different wages depending on how many locations an owner has? Seems weird.)
Not unexpected. The bigger the business, especially when it has many locations, the more likely it can justify higher wages. Similar to how a business can attempt to justify paying its C-level management higher compensation when the business has more locations.
The CalMatters website provides excellent coverage of a recent fierce two-year battle - labor groups and the California State Legislature vs. the fast-food industry - that for now provides at least a $20 an hour wage for California-based fast-food workers for chains with 60 or more locations around the nation.
While I’ve gleamed relevant statements from the following CalMatters articles that address your question, I highly recommend reading the entire articles.
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JUNE 2, 2022
California may give fast food workers power to bargain with their industry
IN SUMMARY
Push to pass a labor-sponsored bill is a key ‘Fight for $15’ priority and a potential organizing foothold in an industry where unionization has long been elusive.
• AB 257 threatens to upend the fast food franchise business model in California. It would create a state-run council to negotiate wages, hours and working conditions for an industry that, according to federal data, employs more than 700,000 people in the state.
• Under the bill, employers would be responsible for the regulations, but so would the fast food corporations that partner with franchise owners.
• The Service Employees International Union’s push to pass AB 257 is one of the most significant organizing efforts in its “Fight for $15” campaign, a chance for a foothold into a low-wage industry where unionization has long been elusive.
• California has been a proving ground for the union’s efforts to advocate for low-wage workers. Los Angeles adopted a $15 minimum wage in 2015 and the state followed suit in 2016.
• But franchisors and franchisees say AB 257 is unnecessary and burdensome and would raise prices for working-class customers.
• After narrowly passing the state Assembly in January, the bill is set to receive its first Senate hearing June 8.
• The SEIU and its allies in the state Legislature want California to establish joint responsibility, holding franchisors liable for labor law violations at their franchisees’ locations.
• The bill would create an 11-member council composed of business, labor and state representatives. It would set across-the-board standards for fast food chains with 30 or more locations, franchised or not.
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AUGUST 30, 2022 (UPDATED SEPTEMBER 16, 2022)
Newsom signs bill to regulate wages for fast food workers
The new law will give labor advocates a long-elusive bargaining foothold in a low-wage industry that employs more than half a million non-unionized workers statewide.
• The United States and California have used boards for other industries before to set minimum wages, particularly during the first half of the 20th century. But, Andrias said, the fast food bill is “a more expansive and ambitious variation” of those past efforts by having workers sit directly on the council and covering a wider range of working conditions.
• The fast food industry, however, is trying to qualify a referendum for the 2024 ballot to overturn the law. State officials cleared the referendum for signature gathering Friday Sept. 16. Supporters need 623,000 signatures by Dec. 5 to get the question before voters.
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DECEMBER 12, 2022 (UPDATED JUNE 2, 2023)
Ballot blockade: California industries rely on referenda to stop laws
IN SUMMARY
The fast food and oil industries are only the latest to seek a referendum to stop, or at least delay, a law passed by the state Legislature. The return on investment can be huge — so much money that some are calling for changing the referendum rules in California.
[Updates: On Jan. 24, the Secretary of State’s office announced that the referendum on the fast food law has qualified for the November 2024 ballot. On Feb. 3, the office announced that the referendum on the oil well setback law has also qualified. On May 31, the state Assembly passed a labor-backed bill to change the referendum process to limit the influence of business groups.]
• For a reported cost of just more than $4 million, California’s fast food industry may have bought itself a two-year reprieve from one of the most contentious state labor laws in recent memory.
• In early December, a coalition led by the International Franchise Association and national business groups announced it had collected enough signatures to qualify a referendum for the 2024 ballot. If at least 623,212 of the 1 million-plus submitted signatures are valid, that would give voters the opportunity to overturn a first-in-the-nation law that would create a state council to set wages and other workplace standards for a large swath of California’s burger-flipping, taco-hawking industry.
• The 2024 election is still nearly two years and many millions of dollars away, but the likely qualification of the referendum constitutes its own victory for the franchisees: It would buy them some valuable time.
• Unlike initiatives — ballot measures that enact new laws — referenda, which overturn statutes passed by the state Legislature and signed by the governor, have an added feature that benefit their backers even if they ultimately lose on Election Day. As soon as a referendum campaign qualifies for the ballot, the law that it targets is put on hold. And because state law only allows referendum votes to be held during regular general elections, that reprieve can last as long as two years.
• That could explain why the “people’s veto” seems to be having a moment of late. With Democrats dominating the Legislature and governor’s mansion and proving ever more willing to aggressively regulate, penalize or phase out specific industries, those targeted interest groups have turned to the will of the electorate.
• Under the moniker “Save Local Restaurants,” fast food giants such as In-N-Out Burger, Chipotle, Starbucks and McDonald’s have raised nearly $21 million to overturn the labor-backed law. The group had spent $4.3 million through the end of September, according to its most recent filing, with the bulk of that money being used to fund signature gathering. It’s a continuation of a battle the industry has been waging throughout the year. In the final months of the last legislative session, the International Franchise Association spent more than $5 million lobbying members of the Legislature not to support Assembly Bill 257.
• It’s not difficult to see why overturning the law — or at least delaying its implementation — might be worth the expense. One of the law’s provisions would allow the new council to mandate a minimum wage as high as $22 an hour next year for fast food restaurants, compared to the overall minimum wage that rises to $15.50 an hour on Jan. 1.
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SEPTEMBER 11, 2023 (UPDATED DECEMBER 29, 2023}
Last-minute deal: Wage hike for fast food workers, no ballot measure in 2024
IN SUMMARY
A deal announced today (9/11/2023) by labor groups and the fast food industry would give workers a $20 minimum wage and pull a referendum measure off the 2024 ballot. The Legislature has until Thursday to approve it.
Update: The Legislature approved the deal on the last night of the session Sept. 14. Gov. Gavin Newsom signed the bill on Sept. 28. The referendum was officially withdrawn on Dec. 29.
• A two-year battle between labor groups and fast food giants is culminating in a last-minute deal announced today that would give workers a $20 minimum wage starting next April if businesses agree to nix their November 2024 ballot measure to undo a landmark law regulating the industry.
• The agreement, detailed in changes to Assembly Bill 1228, averts what would have been a costly campaign for both sides. And they each get a major concession: It ensures at least a modest raise for workers, while the industry gets lawmakers to back off on a controversial proposal to hold fast food corporations legally responsible for labor violations in their franchise locations.
• The 2022 law would have established a state-run council with worker and business representatives to write rules regulating wages and working conditions in fast food restaurants — an industry labor organizers have long struggled to unionize. The council would have had the power to raise the fast food minimum wage to as much as $22 an hour. The statewide minimum wage rises to $16 on Jan. 1.
• The law was quickly put on hold last fall when restaurant groups and major fast food corporations poured millions into a signature-gathering campaign to have voters repeal it on the 2024 ballot.
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Not everyone is happy with this outcome, especially among others, fast food franchisees who were completely left out of the negotiations.
This battle is not over and for now lies in abeyance for the next couple of years before labor groups and their current supporters in the California legislature try again, addressing the fast-food industry.
