Labor groups and fast-food companies in California have struck a deal to raise the minimum salary of workers in the industry to $20 per hour.

The Service Employees International Union announced the agreement, which will result in changes to Assembly Bill 1228, on Monday. It will result in an increase in the minimum wage of industry workers in California by April.

Raising Minimum Wages

In exchange for the increase in minimum wage, labor groups and their allies in the Legislature will agree to the fast-food industry's demands. These include the removal of a provision from the bill that could have made restaurant companies liable for workplace violations that were committed by their franchises.

The deal is contingent on the withdrawal of a referendum proposal made by restaurant companies in California. It would have challenged the proposed legislation in the 2024 ballot and comes as businesses, labor groups, and others have often used the ballots in the state to block legislation or advance their causes, as per the New York Times.

The proposed legislation would also lead to the creation of a council that would be responsible for overseeing future increases to the minimum wage and enacting workplace regulations. In a statement, a fast-food worker and union member, Ingrid Vilorio, said that with the crucial changes, the bill clears the path for them to start making much-needed improvements to the policies that affect workers in California.

The executive vice president of public affairs at the National Restaurant Association, Sean Kennedy, added that the deal would also benefit restaurants. He said that the agreement protects local restaurant owners from significant threats that would have made it difficult to continue operating within the state.

Kennedy notes that the deal provides a more predictable and stable future for restaurants, workers, and consumers. The California Legislature last year passed Assembly Bill 257, which would have led to the creation of a council that had the authority to raise the minimum wage to $22 per hour. However, it met fierce opposition and it was later scrapped.

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Hundreds of Thousands of Beneficiaries

The deal comes as there are roughly 500,000 fast-food workers in California who would benefit from the increased minimum salary. It also comes as a separate bill will increase the salaries of the roughly 455,000 healthcare workers, excluding doctors and nurses, up to at least $25 per hour over the next decade, according to Yahoo News.

However, both proposals must first pass the state Legislature and be signed into law by California Gov. Gavin Newsom. Fortunately, they both have support from labor unions and industry groups, which clears the path for passage this week before lawmakers adjourn for the year.

The two bills are only a small portion of the impressive run of results for labor unions in the state Legislature this year alone. On Monday, the state Assembly voted to advance a proposal to give striking workers unemployment benefits. This is a policy change that could later benefit Hollywood actors and writers and Los Angeles-area hotel workers who have been on strike for the majority of this year, said ABC News.

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