A two-year standoff between the fast food industry and labor unions ended this week as stakeholders announced a deal that will increase the minimum wage to $20 for California workers at fast food chains with more than 60 locations nationwide.

As we previously reported, in September 2022, California passed A.B. 257, which created a 10-member fast-food council with authority to set wage, hour, and working condition standards for fast food workers in California. The law was vehemently opposed by the fast-food industry, who claimed the law would devastate the industry.  Opponents raced to gather enough signatures to qualify for a referendum on the November 2024 ballot to repeal the law, and on January 13, 2023, a Sacramento judge issued a preliminary injunction that prevented the law from taking effect until California voters decided the fate of the referendum.

In response to the referendum, the Legislature introduced a separate bill in February 2023, A.B. 1228, that would make fast food franchisors jointly liable for labor violations committed by their franchisees, potentially upending the franchise model that dominates the industry. A.B. 1228 was passed by the State Assembly in June but has not yet been approved by the Senate.  Over the summer, California lawmakers also attempted to revive the Industrial Welfare Commission (“IWC”), which was defunded almost two decades ago.  A revived IWC would have the authority to pass regulations to protect fast food workers in the event A.B. 257 was repealed.

Last week’s compromise, detailed in changes to A.B. 1228, appears to put an end to this legislative arms race for now.  Pursuant to the deal, the $20 fast food minimum wage will take effect April 2024, and the referendum to repeal A.B. 257 will be withdrawn.  In exchange, the franchisor joint liability provision will be taken out, the IWC will remain unfunded, and certain modifications will be made to the fast-food council created in A.B. 257 to give it less sweeping powers and ensure it has representatives from industry and franchisees.

The bill was approved by the California legislature on Thursday and is expected to be signed into law by Governor Gavin Newsom.  When their wage rate increases to $20 per hour in April 2024, fast food workers will have the highest minimum wage in California.

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Photo of Jonathan Slowik Jonathan Slowik

Jonathan Slowik represents employers in all aspects of litigation, with a particular emphasis in wage and hour class, collective, and representative actions, including those under the Private Attorneys General Act (PAGA). He has defended dozens of class, collective, and representative actions in state…

Jonathan Slowik represents employers in all aspects of litigation, with a particular emphasis in wage and hour class, collective, and representative actions, including those under the Private Attorneys General Act (PAGA). He has defended dozens of class, collective, and representative actions in state and federal trial and appellate courts throughout California and beyond. In addition to his core wage and hour work, Jonathan has defended employers in single-plaintiff discrimination, harassment, and retaliation cases, and in labor arbitrations. Jonathan also regularly advises clients on a wide range of compliance issues and on employment issues arising in corporate transactions.

Jonathan has deep experience representing clients in the retail and hospitality industries, but has assisted all types of clients, including those in the health care, telecommunications, finance, media, entertainment, professional services, manufacturing, sports, nonprofit, and information technology industries.

Jonathan is a frequent contributor to Proskauer’s California Employment Law Blog and has written extensively about PAGA on various platforms. He has been published or quoted in Law360, the Daily Journal, the California Lawyer, the Northern California Record, and the UCLA Law Review.

Jonathan received his B.A. from the University of Southern California in 2007, magna cum laude, and J.D. from UCLA School of Law in 2012, where he was a managing editor of the UCLA Law Review.

Photo of Laura Vaughn Laura Vaughn

Laura Vaughn is an associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration Practice Group and Counseling, Training & Pay Equity Practice Group.

Laura has experience defending employers in a variety of employment actions, with…

Laura Vaughn is an associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration Practice Group and Counseling, Training & Pay Equity Practice Group.

Laura has experience defending employers in a variety of employment actions, with a significant focus on class, collective, and representative actions involving wage and hour issues, including the following:

  • Private Attorneys General Act (PAGA)
  • Fair Labor Standards Act (FLSA)
  • Meal and Rest Breaks
  • Reimbursement of Expenses
  • Off-the-Clock Work
  • Wage Statements
  • Final Pay

She also counsels employers on a diverse range of employment issues.

Laura has represented clients in a number of industries, including retail, hospitality, and communications.

Laura received her B.A. from UCLA, cum laude, and J.D. from USC Gould School of Law, where she was a member of the Hale Moot Court Honors Program.