California Fast-Food Workers to Receive $20 an Hour Minimum Wage

California Governor Gavin Newsom has signed a new bill into law that raises the minimum wage for fast-food workers in the state to $20 an hour.

This move also grants these workers a greater say in setting workplace standards, Reuters reported Friday (Sept. 29).

The legislation emerged as part of a compromise between fast-food companies and labor unions, with fast-food companies agreeing to remove a 2024 ballot referendum that sought to repeal a law focused on improving wages and working conditions, according to the report. In return, labor unions dropped their push to hold fast-food corporations liable for violations committed by their franchisees.

The new minimum wage of $20 an hour is a significant increase from the median wage for fast-food workers in the United States, which was $13.43 an hour in 2022, the report said. In California, the average wage for fast-food workers was slightly higher at $16.60 an hour. With the new minimum wage, these workers can expect to earn an annual salary of $41,600.

In addition to raising wages, the new law establishes a “Fast Food Council” that includes representatives for both workers and employers, per the report. This council will have the power to approve further pay increases and set standards for working conditions.

The overall minimum wage in California is $15.50 an hour, one of the highest in the country, according to the report. In contrast, the federal minimum wage has remained unchanged since 2009 at $7.25 an hour.

California is home to over 550,000 fast-food workers across 30,000 locations statewide, per the report. Newsom said the majority of fast-food workers in California are the primary providers for their families.

Fast food restaurants had pushed back against the bill as it passed the state Senate and headed to the governor’s desk. They argued that the bill would hurt consumers by raising restaurants’ menu prices.

“Every resource at our disposal will be used to ensure our entire membership is asking the governor to veto this bill,” California Restaurant Association President Jot Condie told The Wall Street Journal in August.

It has also been reported that as the cost of running a restaurant in California rises, some locations may close and franchisees may look for expansion opportunities outside the state.