California Passes Law Regulating Fast Food Industry

September 7, 2022

Last week, California’s legislature passed a bill that will bring sweeping changes to fast food chains operating in the state. After being signed into law by the governor on Monday, the new legislation effectively sets a minimum wage for the industry while also establishing new safety and anti-discrimination requirements. California will create a 10-person council composed of restaurant workers and employer representatives along with two state officials, who will all review pay and safety standards across the state’s restaurant industry.

Not only could the council raise the minimum wage for fast food workers to $22 an hour as soon as next year, the law also requires companies to provide annual cost-of-living salary adjustments starting in 2024. California’s new bill applies to restaurant chains with at least 100 locations nationwide, ranging from companies like Starbucks that largely own and operate their stores to franchise-driven firms like McDonald’s. “In my view, it’s one of the most significant pieces of state employment legislation that’s passed in a long time,” said Kate Andrias, an expert on labor law at Columbia University. “It gives workers a formal seat at the table with employers to set standards across the industry that’s not limited to setting minimum wages.”

California’s new legislation is similar to European “sectoral bargaining” deals, a rarity in the U.S. only approximated in other sectors like car manufacturing. Fast food companies and trade groups lobbied tirelessly against the law, saying that it could lead to lower profits and higher prices for already strained consumers. “This bill is a fork in the eye to franchise owners and customers at a time when it hurts most,” Matthew Haller, president of the International Franchise Association. According to labor advocates, though, the bill improves conditions for a historically vulnerable population of workers, providing safeguards that could provide some stability in an unpredictable industry. And if the bill is seen as successful, it could lead to the passage of similar laws in states across the country. 


  1. What sort of changes will California’s law bring to the state’s fast food industry?
  2. Do you think other states should pass labor legislation similar to California’s new law? Why or why not?

Sources: Noam Scheiber, “California Governor Signs Bill to Regulate Fast-Food Industry,” The New York Times, September 5, 2022; Noam Scheiber, “California Senate Passes Bill to Regulate Fast-Food Industry,” The New York Times, August 29, 2022.