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A California bill that has pitted food workers against the franchisees and giant companies that employ them will face a key legislative test in the State Senate Appropriations Committee on Thursday.

Assembly Bill 257, also known as the Fast Food Accountability and Recovery Act, would create a state council to negotiate on behalf of California’s more than half a million fast food workers. The bill would affect any food chain that has more than 30 establishments nationally.

Food workers say the change is needed

Supporters of the bill have said despite California’s already existing strict labor laws, fast food workers have been subject to low wages, wage theft and unsafe working conditions that put them at an increased risk of burns and other injuries. The bill is sponsored by California’s powerful labor group, Service Employees International Union (SEIU).

“For the past three years, I had been working without 10-minute breaks because I didn’t know we had the right to that,” said Maria Fernandez, a Sacramento-area Jack In The Box employee who said she has been working there for about five years.

She described difficulties working in the summertime among hot appliances coupled with a broken air conditioning system. She said the COVID-19 pandemic presented another set of concerning working conditions.

“When we found out the people were sick at work, the manager told us it was fine and to double mask and to keep working and to specifically not tell anybody,” Fernandez said.

Fernandez is also the mother of a 5-year-old son who told her he wants to work at Jack In The Box. To that, she said if he's going to do that, she would want to make sure he has good pay and benefits before making that decision.

"We put our life into these jobs, and they should do something for us," Fernandez said.

Crystal Orozco said she worked at the same restaurant before leaving for a Mcdonald's also in the Sacramento area. She said while working for Jack In The Box, her hours were cut after striking for better wages and working conditions.

“Even working at McDonald's, you see the intimidation, and how they put down the workers just to keep workers in check, to have it their way,” Orozco said. “You’re still going to get punished by having your hours taken away.”

In a statement Wednesday night, the bill's author, Assemblymember Chris Holden, D-Pasadena, said in part, "The bill sets the tone for an industry wide inclusive approach to problem solving, by including franchisors, franchisees, employee representatives, and stakeholders. As a former franchisee, I view this bill as the start of a conversation to solve issues that we cannot afford to ignore. While California continues to take the lead by being among the country’s highest minimum-wage, worker-protection and health mandates, AB 257 only continues that legacy with all the stakeholders at the table."

Opponents say the state should step up enforcement

Opponents of the bill note Fernandez and Orozco’s experiences are violations of current state law.

“The proponents of the bill are saying they’re trying to address violations of labor law like wage theft and meal and rest break violations, those are violations of existing law,” said Greg Flynn, a franchisee of 24 Panera Bread restaurants in Northern California. “What’s needed is enforcement of those laws.”

Flynn said if approved, the bill would create rules that would be more onerous, difficult, and expensive for franchisees like him to comply with. He says increased costs would be passed onto customers.

“Our margins, our profits have gone down from 9% to 3.5%. We’re barely hanging on. And when I think about the creation of a state council that is designed specifically to add more costs, I don’t know if we can make it.”

Flynn, who said his first job was at McDonald's, said chain restaurants represent one of the greatest engines of entry-level jobs, and said this bill could threaten those opportunities.

“You can say, fast food, you need to pay $30 an hour. You can say that, but you know what we’ll do? We’ll get rid of as many entry-level jobs as we can. We’ll have to. We’ll automate, and those kids won’t get their foot on that ladder.”

Jot Condie, the President and CEO of the California Restaurant Association, said the bill is unnecessary and would decimate the industry.

Condie pointed to a recent study by the Employment Policies Institute showing limited-service restaurants accounted for 1.5% of total lawsuits where employees were awarded, and made up 1.6% of total annual wage claims filed with the state Division of Labor Standards Enforcement. Condie said there is a known backlog of labor violations generally across the state.

“Our suggestion to the Legislature is, instead of creating an entire new infrastructure that is very expensive and will probably tie up the courts even more, what they should do instead is appropriately fund the agencies that are charged with protecting workers today,” Condie said.

How much would Assembly Bill 257 cost?

The bill’s latest analysis by the State Senate Appropriations Committee estimates the bill could cost the state tens of millions of dollars, with increased pressure on the state’s court system. The cost drivers include providing staff and resources for the rule making and workload of the 13-member council.

Gov. Gavin Newsom’s Department of Finance released an analysis June 16, taking an opposed position to AB 257. In a memo, the department said the bill would create significant and ongoing costs at the Department of Industrial Relations, lead to a fragmented regulatory and legal environment for employers and raise long-term costs across industries.

“Finally, it is not clear that this bill will accomplish its goal, as it attempts to address delayed enforcement by creating stricter standards for certain sectors, which could exacerbate existing delays,” the memo reads.

If passed Thursday, the bill would still require full approval from the Senate and then approval again in the Assembly for technical changes made to the bill earlier this year.

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