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What would California’s “fast food” bill mean for wage disputes?

On Behalf of | Aug 25, 2022 | Wage and Hour Laws |

Most fast food workers are employed by franchisees – not by the corporations that we all know by name and sometimes just by their logo. That means when they have a wage dispute or other employment issue, they (or the state) must take it up with the owner of the local franchise.

Some California lawmakers believe that corporations, rather than their franchisees, should be held liable for wage violations such as failure to pay overtime or minimum wage. A “fast food” bill (AB 257) has passed the California Assembly and is currently awaiting a vote in the Senate. 

Strong advocacy on both sides

If it passes and is signed by Gov. Gavin Newsom, it would be the first law of its kind in the country. However, the bill has its detractors – including the California Division of Finance and the California Chamber of Commerce.

Advocates for the bill, including the Service Employees International Union (SEIU), argue that fast food chains should be held responsible when their franchise owners engage in wage theft or other violations. These tend to be more prevalent in industries that rely on hourly workers who are often paid only minimum wage. By holding the corporations directly liable, they hope to minimize violations.

Those opposed argue that it would raise costs for everyone involved, which will ultimately be passed on to consumers. They also say that it will increase the delays the state already faces when it deals with labor issues.

Similar state laws apply to other industries

While this law would be the first of its kind for fast food workers, similar laws have been enacted in California in recent years for other industries – including garment manufacturing, nursing homes and construction – that make those at the top of the chain liable for wage theft.

Regardless of what happens with this bill, it’s important to understand your rights as an hourly employee and to stand up for those rights. You have the right to address any mistakes, discrepancies or other issues with your payment with your manager without suffering any negative consequences as a result. If you believe your employer is not following the law and you’re not able to resolve the matter with them, it may be wise to find out what legal options you have.