Legislators Consider Changes in Labor Laws to Benefit Fast-food Workers

Amid growing awareness of inequality and jobs that don’t pay enough to cover child care and housing, California is considering a radical proposal: Allow the state to negotiate wages, hours and work conditions for an entire industry.

Proponents in the state Legislature say one solution to inequality is to empower workers to negotiate through unions, but that’s not happening in the fast food industry where frequent turnover, inexperience and intimidation make it too difficult for workers to organize. Only 3% of fast food and counter workers belong to unions nationwide.

In Sacramento, a union-backed Democratic proposal called the Fast Food Accountability and Standards Recovery Act, or FAST Recovery Act, would establish a state-appointed council to enact industry-wide minimum standards for wages, working hours and work conditions. If passed by state lawmakers and signed by Gov. Gavin Newsom, the proposal would also hold corporate franchisors responsible for compliance, not just the local franchise owners.

“California has the opportunity to really pave a path forward in a way that can work for both workers and employers,” said David Madland, a senior adviser to the American Worker Project at the Center for American Progress, a liberal Washtington, D.C., think tank.

Legislation to approve the FAST Recovery Act, AB 257, fell three votes short of passing the state Assembly last June with eight Democrats voting no and another 13 not voting. Newsom did not take a position.

With strong support from major state labor groups, the issue is expected to resurface this year even though the bill’s author, Assemblymember Lorena Gonzalez, unexpectedly resigned from office the first week of January to transition into chief officer of the California Labor Federation, which supports the proposal.

One of the nation’s largest unions, Service Employees International Union, vowed to continue pushing the bill. It funds the Fight for $15 and a Union campaign, which organizes low-wage workers to advocate for better wages and work conditions, primarily in fast food. A rally is scheduled for Wednesday at the state Capitol and Assembly Speaker Anthony Rendon could transfer authorship to a committee or another lawmaker.

“The path forward on this bill is still being worked out,” said Rendon’s spokesperson Katie Talbot.

Address low wage and poor conditions

Proponents, who have set up a website, say the FAST Recovery Act is needed to address low wages and poor conditions for workers. California’s fast food workers — a majority of whom are people of color, Latino and women — made an average $14.73 an hour in 2020, with California’s minimum wage rising to $15 this month for most businesses. Proponents also point out they are more vulnerable to COVID-19 and more likely to encounter injury, wage theft, customer assault and harassment.

A new report from the UCLA Labor Center documents dangerous conditions during the pandemic, with nearly a quarter of surveyed workers having contracted the virus. Less than half said their employers offered paid sick leave — mandated by state and federal law — to workers who got COVID-19.

“It may not be in the cards to have the kind of traditional labor format we’ve seen in the United States in the near future,” said Saru Jayaraman, director of the UC Berkeley Food Labor Research Center. “But it may very well be in the cards to see these really innovative sector-wide, power-building strategies that change entire sectors.”

The idea of negotiating wages and work conditions for an industry, rather than for each workplace separately, has been modeled for many years in Europe and around the world. Known as “sectoral bargaining,” it has also gained support among progressives in the U.S. such as Bernie Sanders and Elizabeth Warren as a way to reduce income inequality.

Multiple studies of sectoral bargaining in other countries have found evidence that it reduces inequality, and tends to swell union ranks — with some notable exceptions. But a number of European studies find that sectoral bargaining can reduce profits or productivity for companies. A 2015 study found that sectoral bargaining led to more layoffs during the Great Recession in Europe.

Under current American labor law, true sectoral bargaining is rare because multiple employers would have to voluntarily agree to come to the same negotiating table with workers, said Madland, the researcher at the Center for American Progress. He says America achieved this in the auto industry more than a century ago, and rail workers benefit from that arrangement today.

However, American “workers cannot insist on multi-employer bargaining,” unlike in other countries, he said.

The California proposal would carve a state path by directing an 11-member council — composed of fast food workers, franchisees and franchisors, and state health, safety and labor officials — to do the negotiating. The governor and leaders in the state Senate and Assembly would appoint the members. Its rules would be revisited every three years and, unlike traditional collective bargaining, they would be enforced by state agencies. The laws would apply to every restaurant that belongs to a fast food chain with 30 or more franchises.

Opposition from business, moderate Democrats

It’s a highly controversial proposal with opposition from industry, Republicans and a divide among Democrats.

Before the bill’s failed Assembly vote in June, Assemblymember Ken Cooley, a moderate Democrat from Rancho Cordova, said the power given to an unelected council was an “exceedingly problematic” precedent that is “undermining of the rule of law.”

Business groups are also adamant the government stay out of private negotiations. They argue the free market adjusts wages where it is needed, citing the fact that  many California fast food restaurants are now raising their wages to $17 or $18 per hour to attract workers amid a labor shortage.  Republicans said the bill was an example of government overreach that would destroy minimum wage jobs and small businesses. Meanwhile, the coalition of organizations lobbying against the bill, which include 40 local and ethnic chambers of commerce, launched a website with the slogan “Stop the Takeout Takeover.”

“The people who will pay for Lorena Gonzalez’s initiative aren’t the ‘evil corporations.’ It’s the working people who rely on that fast food” for either meals or employment, said Will Swaim, president of the right-leaning California Policy Center.

Industry groups also questioned whether the new model is needed since California is known for the strictest labor standards in the country, such as being first to set the $15 minimum wage and protections against heat illness.

“Throwing all of that out to this test case of a panel is absurd,” said Matt Sutton, a senior vice president at the California Restaurant Association.

Sutton also said the FAST Recovery Act’s extension of liability to corporate franchisors could raise costs and potentially drive fast-food chains out of the state. Franchise owners testified in hearings that the bill could change the franchise model, making local owners more regulated by the corporation and less independent.

“AB 257 would result in me and so many other franchisees losing our autonomy since the state would essentially be stripping us of our identity as business owners and making us basically employees for large corporations,” said Michaela Mendelsohn, a franchise owner of multiple El Pollo Loco restaurants, at a spring hearing.

State-imposed bargaining

Gonzalez said she also believes her bill is not the best solution. She says the state government shouldn’t be in the business of bargaining and she would rather maintain “a private-sector approach to reducing income inequality.” Unions, Gonzalez added, do a better job responding to workers’ needs worksite by worksite instead of one-size-fits-all state labor laws, which employers fight and the government enforces unevenly.

But given that businesses continue to fight union drives, Gonzalez said, and the U.S. Congress has stalled on federal labor law reform, the FAST Recovery Act is necessary to help workers and, she hopes, encourage more support for labor unions.

“Maybe an individual fast food franchisee or restaurant says ‘You know what, I’d rather have a conversation with my workers in my workplace, allow them if they so want to unionize, and provide them not what these people at the state level are bargaining for but what the workers in my workplace actually want,’” Gonzalez said. “That would be a great solution.”

For now, though, Assemblymember Ash Kalra, a San Jose Democrat who chairs the Assembly labor and employment committee, said that where labor organizing campaigns have failed in low-wage industries, the government needs to act.

“That’s the only way you can do it in some of these industries,” Kalra said. “Worksite by worksite is nearly impossible.”

Fast food workers protest

Two McDonald’s workers agreed. At different franchises in California, both helped organize two-week walkouts during the pandemic, with support from Fight for $15.

Imelda Arroyo earns $15.50 per hour at a McDonald’s in Oakland. She has little left for her 7-year-old daughter after paying $1,950 for rent. The single mother feels she deserves better wages, health insurance, paid sick leave, and “a place where we can explain our concerns” before having to resort to strikes.

Even though “fast food workers like me don’t have a union,” Arroyo said, “at least we are hoping to get something like AB 257.”

Another worker, Imelda Rosales, said her weekly hours were cut from 40 to 27 after protesting unsafe work conditions and unpaid sick leave last winter at a McDonald’s in a small, desert town near Palmdale.

The franchise owner, Andrew Marroquin, said the restaurant complied with paid emergency leave for all employees and didn’t retaliate, but Rosales disputes his claim.

“We have to hurry up and fight so that the law passes,” Rosales said. “And then continue (fighting) for the union after.”

Jackie Botts and Jess Bedayn are reporters with CalMatters. This article is part of the California Divide project, a collaboration among newsrooms examining income inequality and economic survival in California.

 

27 Comments

  1. Let the market decide –
    Get Big Government out of my Fast Food.

    It Boils down to Personal Responsibility & “Paying Your Fair Share”.

    “Paying Your Fair Share” includes working hard, focusing on learning in K-12 school or choosing to learn a trade or skill that will support your future ambitions..
    To be a Contributing and Productive Member of Society…
    ….
    Who do we hold responsible for creating a ‘Low Skill’ Population?

    Only qualified for minimum wage employment.. for lifetime?

    Schools… School Boards, Teachers Unions, Teachers, Parents, or Students?

    These “Minimum” Wage jobs have traditionally been for students, part-timers, semi-retired or persons looking to contribute to a cottage industry or family business.

    Some may rise to management level and make a career out of it or open their own small business or franchise, but most of these are stepping stones to adulthood.

    These service industry jobs are a “First-Employment” learning experience for high school students working toward higher education to learn How to be Productive Parts of Society…
    Or
    ….for older, semi-retired to supplement a poorly planned retirement,
    Not for Fully Functioning Adults to support a Family of 4 or 5.

    #PersonalResponsibility.

  2. Here is what will happen.
    The State will negotiate for hours, wages and work conditions for these employees.
    The Employers will automate. An app for ordering, either in advance or in the store. These are already there. Customer will fill their own soda with a token. The only employees needed are making the burgers and fries, and there are already robots for that.
    Thank you, CA progressives, you have just killed some entry level jobs.

  3. Ca PAtriot,

    Your claims support the argument that strong public policies must be established for all workers, especially the “first jobs” because they are the onles where employers exploit the system the most. The fact that these workers have pretty much no clue about their working rights under the law. I speak from expertise given I have a Human Resources Management Business Degree. Yes you can promote the “light touch” model on a system that has proven to be effective at preventing labor law violations. But in this case, the evidence has proven that a “stronger touch” is required to establish that the evidence is supporting a lighter touch, RIGHT? And that public policy is to be complied with even under an “at-will” job market, means that if one violates public policy and fires an employee, it is deemed a wrongful termination. Think about it?

  4. @CYNTHIAJR, you are correct, even 4-5 yrs ago when I travelled throughout Asia and Australia they were using electronic Kiosks for ordering at fast food entry points, and almost everyone used some form of electronic payment via mobile device or metro-travel card.

    It made sense since Australia and New Zealand both had inflated minimum wages of ~ $20AUD.
    And there is also No Tipping in these countries due to the high minimum wages.

  5. Ca Patriot,

    Sounds good to me, give all workers a wage that ensures housing and other essential resources. And have it tied cost of living increases like rents AUTOMATICALLY!

    That would likely allow for less workers needing to work, because a household will have a living income. Thus less workers will be needed for jobs that are automated.

  6. You “give” all the workers whatever wage you want, but leave me out of it.
    What’s that, you don’t employee any workers? Figures.

  7. Work90,

    When I go grocery shopping i am employing workers, as well as any good or service I use. My buying PAYS for the workers RIGHT?

    Without me, no business can work, it is called DEMAND, and if your company has NO DEMAND it is out of business, right?

  8. Just like you pay the cops salary too… whatever.
    Try and meet payroll more than one time and then tell me how much you “give” your employees, especially the ones who didn’t earn it in your opinion. Then tell me how long you can keep it up (or why you would keep it up) if they aren’t earning what you are forced to pay them.
    But hey, it does “sound” compassionate, I’ll give you that.

  9. Work90,

    Well if you have a universal judgment that all workers don’t deserve to be paid for the record productivity all have achieved, there is no use to discuss this with you.

    It is well known that productivity is at record levels, but compensation has constantly declined.

  10. actually, I think y’all may be wrong on this one

    in the beginning it will seem like said “relations board” will help the little guy

    but we all know it’s just a matter of time before the regulator gets captive and said board actually begins caping wages and other benefits to suit the employers needs instead of the workers

    like worker’s comp

    or rent control

    or causa justa

    or environmental protections

    or lending regulations

    or like EVERYTHING the government does

    baaaahahahahaha

    clowns

    you want more money, work hard, develop skills, figure out how your boss is failing his customers, then start your own business and fix it!

    stop whining, stop thinking they teach you anything in school, stop freeloading, stop complaining

  11. Not him,

    lets look at recent history. Labor Commissioner Revokes Garment Manufacturer’s License for Labor Law Violations and Informs Employers of New Law for 2022: VRP Fashion, Inc. owner Veronica Rojas Pablo stated in her garment manufacturers license application that the business had no employees. But an onsite inspection at the West 6th Street facility on May 19, 2021, revealed workers sewing garments. The Labor Commissioner’s Office cited Pablo after she did not provide proof of workers’ compensation insurance coverage and ordered her to stop work until such coverage was purchased. Pablo did not respond to the order nor did she appeal the citations. She barred an inspector from a follow-up visit and had workers leave the premises from a back exit.
    This is a First case. White collar crime like this is far more dangerous than other crimes.

  12. Mot Him,

    Here is another deonstration A survey of 400 Los Angeles fast-food workers found nearly a quarter said they caught COVID-19 and nearly 2 in 3 said they fell victim to wage theft during the pandemic. Nearly two-thirds of fast-food workers surveyed by the UCLA Labor Center also said they experienced wage theft. That includes nearly half reporting that they had to buy their own uniforms or equipment. Most who said they worked overtime hours also said they were not paid time and a half, as required by law.
    The hours they did work were also immensely stressful, with low-wage employees asked to enforce COVID-19 safety measures that some customers and coworkers chose to defy. More than half of fast-food workers said they experienced “negative interactions” with patrons or colleagues over such measures, such as mandatory masking, with 34% saying they had been yelled at.
    This is the second case example

  13. Not Him,

    What about the case of a retired San Jose Police officer who owns a security business pleaded no contest to insurance fraud, tax evasion, money laundering, and worker exploitation and is expected to be sentenced to three years in jail, prosecutors said.

    Robert Foster, who retired from the San Jose Police Department after he was charged in the case in July 2020, owns Atlas Private Security with Mikaila Foster, his wife, who also pleaded no contest and is expected to be sentenced to one year in jail and five years of probation, said Santa Clara County District Attorney Jeff Rosen.

    I can go on and on, not only were current laws violated, but massive FRAUD. And you say the solution is the simple and I quote:

    “you want more money, work hard, develop skills, figure out how your boss is failing his customers, then start your own business and fix it!”

    YOU KNOW IT IS NOT THAT SIMPLE. THERE IS GREAT BARRIERS TO ENTRY WHEN YOU HAVE EXISTING BUSIENESSES CHEATING!!!

  14. How about we leave the middle-man out of it and the employee agrees to work for the employer based on whatever the two of them agree is fair. If they can’t come to an agreement, then they don’t work with each other. Doesn’t that sound a lot easier? (though maybe it doesn’t sound as compassionate). Then the employee and the employer have more money to split, and the middle-man (who doesn’t actually contribute to either, but scalps money from both) is left to find someone else to take money from. Seems like it just might work to me.

  15. Work90,

    There are no middlemen in the game unless you are talking about contractor or sub contractors. For example PayPal employs 70% of the work performed as contractors and NOT employees. The government is NOT a MIDDLE MAN. Public policies are NOT MIDDLE MEN. Maybe you should rethink your statement here. Simply put you are arguing the basis of At-Will employment, but there are 4 exceptions to at-will, which one is public policies. If the CUSTOMERS go to their legislators and demand changes to PUBLIC POLICY and they succeed, so be it. Still you hve not addressed the fact that so much FRAUD and employee ABUSE has occured. MIGHT WORK has been proven wrong at this time!!!

  16. Work90,

    Please understand for example a minimum wage is not “and the middle-man (who doesn’t actually contribute to either, but scalps money from both) is left to find someone else to take money from.” In fact labor regulations are not used to SCALP anyone. A minimum wage is not “scalped” by anyone because it is treated the same for all people regarding income taxes at the very most. You have not proven your opinion with evidence, you simply claim to be of an authority to declare what the situation is. But being a FAKE person with no credentials to establish your proficiency in the matter, should readers take your word for it?

  17. someone does not understand the concept of regulatory capture

    I guess they don’t teach that at state schools to sociologists

  18. Not Him,

    I hate to educate you on this but that term is defined as “The concept of Regulatory Capture (Reg Capture) typically refers to a phenomenon that occurs when a regulatory agency that is created to act in the public interest, INSTEAD ADVANCES THE COMMERCIAL OR POLITICAL CONCERNS OF SPECIAL INTEREST GROUPS THAT DOMINATE AN INDUSTRY OR SECTOR THE AGENCY IS CHARGED WITH REGULATING.” It does not in fact say that the GOVERNMENT takes control, but rather the BUSINESSES are dictating public policy. Please be more careful, because you keep on using terms that do not mean what you imply?

  19. OMG,

    The stock market today spent $1.1B in the Dow Jones to get out of the hole today.

    The stock market today spent $675.6B in the NASDAQ to get out of the hole today.

    The stock market today spent $1,929.7B in the S&P to get out of the hole today.

    Someone either just spent $1,929.7B or took out that money in loans to keep the stock market up. But it made no money!!!

    This is INSANE!!! why not spend it to the U.S. and again this was ONE DAY!!! You could have just divided it up to 330,000,000 people and which resultes in $5,847.46. That would have been far more productive because it would have given more economic stability. The facts are capitalists do not know how to make money, they know how to burn it!!!

  20. yes, that is exactly what it is and in end this little board will help employers not workers because it will get captured

    how clueless do people have to be not to see this?

    that’s why they spend money on lobbying and donations and promises of jobs once their public sector job stalls out, to write legislation and the small print regulations that seems like it is doing good but helps them against competitors and employees

    ever hear of revolving doors genius?

    I guess one more thing you haven’t heard of and need to go google, like everything else I taught you

    wake up and grow up, I think you need a refund on your he degree, seems you learned nothing

  21. Not Him,

    Remember the price of liberty is eternal vigilance. Thus upon this passage, yes we WILL have to keep an EYE on it. But by doing so is part of being a citizen of the country and a responsibility.

    So we better contnue to keep an eye on things.

    In any event today was another great day, we lost another $280B in in one day making are total losses for the week as $2T .

    And the new version of monicron has just been spotted in Santa Clara County, HERE WE GO AGAIN!!!

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