California Senate passes bill to regulate fast food industry

The Senate of the state of California, in the United States, approved on Monday (29) a bill that could change the way the service sector is regulated in the country, creating a council to set salaries and improve conditions of work of fast food workers.

The measure, strongly opposed by the fast food industry, was approved by 21 votes to 12. The state legislature had already approved a version of the bill, which now requires the approval of Gov. Gavin Newsom, who has not indicated whether he will sign it.

The bill could represent an important step towards sectoral bargaining, in which workers and employers negotiate industry-wide pay and working conditions, as opposed to enterprise bargaining, in which workers negotiate with individual companies and locations.

While sectoral negotiation is common in Europe, it is rare in the United States, even though certain industries, such as the automobile industry, have arrangements that approximate the model.

The California bill would not bring about true sectoral negotiation — which involves workers negotiating directly with employers, rather than a government entity setting broad standards — but it does incorporate crucial elements of the model.

The bill would establish a ten-member council that would include worker and employer representatives and two state officials and would review payment and safety standards across the restaurant industry.

The council could issue health, safety and anti-discrimination regulations and set an industry-wide minimum wage. The legislation caps the amount at $22 an hour next year, when the state minimum wage will be $15.50. The bill also requires annual cost-of-living adjustments for any new salary floor starting in 2024.

Restaurant chains with at least 100 locations across the country would be under the council’s jurisdiction — including companies like Starbucks, which own and operate their stores, as well as franchisees of big companies like McDonald’s. Hundreds of thousands of workers in the state would be affected.

The council would terminate after six years, but could be recalled by the legislature.

Mary Kay Henry, president of the nearly 2 million-member International Union of Service Employees, which pushed for legislation, said the bill was critical because of the challenges workers faced when trying to change policies by unionizing store by store.

Industry officials argue that the bill will increase labor costs, and therefore menu prices, when inflation is already a widespread concern.