Earlier this week, the 퀸알바 California State Senate passed a bill creating a Fast Food Industry Council, made up of employers, employees, and public officials, to set industry-wide minimum standards for wages, hours, and other work conditions, such as health and safety. A Fast Food Industry Council, made up of employers, employees, and public officials, to set industry-wide minimum standards for wages, hours, and other work conditions, such as health and safety. The primary effect of the legislation, for at least the next six years, is the creation of a new ten-member Fast Food Council with the stated purpose of establishing industrywide minimum standards for wages, hours, and other work conditions related to the health, safety, and welfare of, and providing the necessary cost of adequate living for, fast food restaurant workers–specifically, applying to any chain with 100 or more locations nationwide. The primary effect of the legislation, for at least the next six years, is the creation of a new ten-member Fast Food Council with the stated goal of establishing sectorwide minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers — specifically applying to any chain with 100 or more locations nationally. However, this new council would have jurisdiction over fast food restaurants that are not in the labor force.
Under the legislation, the Council can increase fast food workers minimum wages up to $22 per hour — far higher than the $15 per hour in the state for employers with 26 or more workers. The new law would cap the increase to fast-food workers at chains with more than 100 restaurants at $22 an hour starting next year, with a statewide increase based on cost-of-living increases after that. Californias minimum wage is currently $15 per hour, which is scheduled to rise $0.50 per hour next year, so the new law means fast-food restaurants can see a 47 percent jump in labor costs in the coming year. Given the states minimum wage is scheduled to increase to $15.50 per hour Jan. 1, Fast Food Union may cause an historic minimum-wage spike, which employers would need to scramble to meet just months later, according to Caleb Berhe, an employment associate with Foley & Lardner LLP in Los Angeles.
Californias new Fast Food Labor Law created the council. Californias new fast-food labor law creates the first-of-its-kind board, made up of workers, business representatives, franchisees, and state officials, charged with setting industry-wide minimum standards on wages, hours, and other conditions for fast-food workers across the state. Californias fast-food accountability and standards restoration bill, or the FAST Act, establishes the state-run board, whose members are appointed by Gov. Gavin Newsom and the Legislature, and which will include an equal number of workers, labor and business representatives. In a move that restaurant industry experts warned would drive up the cost of fast food, the governor of California signed into law a bill creating theFast Food Commissionto set standards for wages, hours, and working conditions of the states fast-food workers.
AB 247 transfers responsibility for setting the minimum wage for fast-food workers away from state or federal lawmakers to a board comprised of fast-food workers and union representatives — thereby, by design, giving them a substantial say in setting their wages.
The act exempts fast-food plants in which workers are covered by a valid collective bargaining agreement and regular hourly wages are at least 30% higher than the states minimum for those workers. Under the FLSA, the employer of an employee who is paid tips is required to pay the employee a wage only $2.13 an hour directly, as long as this sum, combined with tips received, is at least equal to the federal minimum wage of $7.25 per hour. If the tips received combined with an employers direct wages of at least $2.13 per hour does not equal $7.25 per hour, then the employer is required to compensate for the difference. Tips can be counted as part of wages, but an Employer must not pay less than $2.13 per hour in direct wages, and ensure the amount of tips received is sufficient to cover the remaining portion of the minimum wage.
A restaurant employer also must pay a tipping employee like an ordinary hourly worker during this period. Under the cap, a restaurant employer might have to convert the tipped worker into a regular hourly worker.
When the employer claims an FLSA 3(m) credit for tips, it is presumed that the tipping employee was paid only minimum wage for all non-overtime hours worked in a tipped occupation, and the employer cannot deduct deductions for walking out, a shortage in cash register, broken equipment, uniform costs, and so on, since any such deductions will lower the wage of the tipped worker to less than minimum wage. The Fair Labor Standards Act (FLSA) defines tipped employees as employees who receive, on average, and on a regular basis, over $30 in tips each month, and requires employers to ensure these employees are paid at least minimum wage. Because unionized restaurants would be exempt from the Act, they would be able to pay their employees lower wages and benefits than the one established by the Board.
They will then be allowed to increase their minimums each year by as much as the federal consumer price index increases, with an upper limit of 3.5%. Under this legislation, the Board could increase the minimum wage in California up to $22 an hour next year, then increase each subsequent year by the lesser of either the national inflation rate or 3.5 percent. Under this set-up, the board could increase the pay floor for fast-service workers to as high as $22 an hour on 2023. The new law is meant to set minimum standards for the 700,000-employee fast-food industry, with the council overseeing dozens of chains, including Starbucks and McDonalds.