Corporate Restaurants Fight for the Right to Exploit Employees
No, There Isn’t a 20% Tax in AB 257
Legislation is moving through Sacramento to establish a system allowing for improved working conditions for California’s 700,000 fast food workers. The FAST Recovery Act (AB 257) passed the California Assembly in January, and is coming up for a full vote in the state Senate in the next few days.
Needless to say, the overlords of the industry are not happy. A furious campaign on social media, along with text messaging, is warning of a “tax” increase and “unelected” appointees imposing untold hell on restaurateurs. As was true with the industry’s propaganda effort against increasing minimum wages, these claims are trash.
A decade has passed since the launch of the Fight for $15, and fast-food workers are still grappling with low and stolen wages, unsafe workplaces, and rampant sexual harassment. That’s true even in California, where legislators intervened to increase the minimum wage.
The “$15” movement by fast food workers was always about more than pay. California reached that wage threshold (for larger employers/smaller will be January 2023) and the sky hasn’t fallen. In fact, economic pressures have forced many fast food outlets to offer considerably more than minimum wage.
Corporations who control the brand name eateries we see along the highway have always hidden behind the excuse that individual locations are run by franchisees when it comes to how workers get treated. In reality, the franchise system dictates the parameters of operations in such a manner that many operators' profit margins are dependent on their ability to exploit the help.
From Vox:
In one survey of California fast food workers, released in May by the Fight for $15, 85 percent said they experienced wage theft on the job. Another recent survey, commissioned by the Los Angeles County Department of Public Health and conducted by the UCLA Labor Center, found 43 percent of workers experienced workplace injury or illness, nearly half experienced verbal abuse, and a quarter said they were retaliated against by their managers for reporting workplace issues.
This month, in a joint study between University of California San Francisco and Harvard’s Shift Project, researchers found California fast food workers are paid nearly $3 per hour less — almost $6,000 less annually — than workers in comparable service-sector jobs across the state, and are more likely to have unpredictable schedules and work part-time involuntarily.
While California already has some of the most robust labor laws on the books, advocates say those rules are often flouted in part because franchisees have little legal authority to make changes to their businesses aside from cutting corners on worker pay. (The bill was introduced by Assembly member Chris Holden, a former Subway franchise owner in Pasadena.)
AB 257 would establish a 13-member council, including political appointees from state health and labor agencies, as well as food industry officials, fast food workers, and union representatives. It would have the ability to set minimum standards for things like wages and working conditions for restaurants where workers aren’t unionized.
These standards would apply to any chain in California that has at least 30 stores nationwide that share a common brand. It also clarifies joint liability for the franchisor and franchisee, and establishes protections for workers who exercise their rights.
The bill’s language would allow a franchisee to sue a restaurant chain if their franchise contracts contain strict terms that leave them no choice but to violate labor law.
Despite the restaurant industry’s propaganda, there is a system of checks and balances. The legislature would have the opportunity to reject or change the council’s proposed standards, as would the state’s Occupational Health and Safety Administration.
“It is based on well-settled principles of law,” write Berkeley law professors Catherine Fisk and Amy Reavis. “It is akin to existing appointed bodies, such as the California Energy Commission and California Coastal Commission, that are designed to tackle difficult issues and ensure input from stakeholders.”
What the hubbub surrounding AB 257 is all about has to do with its larger implications.
The FAST Recovery Act echoes the approach taken in Europe, where unions negotiate working standards that apply to workers across an entire industry, not just one company. This process, known as “sectoral bargaining,” protects workers in industries that rely heavily on part-time staff, contractors, and subcontractors.
Sectoral bargaining, as it exists in Europe, is prohibited by federal labor law. AB 257 addresses this problem by having a state commission, rather than a union, administer the process.
The National Restaurant Association and other industry associations see this legislation as a threat to their business model. They fear such an approach will quickly be adopted by other labor-friendly states.
Perhaps if the industry had more than excuses and deflections as their responses to employees complaints about abuse they wouldn’t need to be so afraid. Wage theft, sexual harassment, and general lack of compliance with existing labor standards are all baked into franchise agreements because such behaviors by management are traditions in the industry.
The made up claim by opponents of this legislation about a 20% tax on dining out is really just a distraction from the fact that many in the industry simply don’t want “woke” standards like making sexual harassment have consequences.
An industry message on social media
Making employees work through breaks and unpaid overtime are rampant, and the National Restaurant Association’s refusal to address these issues beyond a little tsk-tsking is why such legislation is necessary in the first place.
As somebody who worked, managed, and owned foodservice operations at every level, from fast-food to fine dining for more than three decades, I learned early on that bad behaviors toward employees were “normal” and “necessary.” The degree to which these things applied varied, but their acceptance as a way of doing business was universal.
There is no assurance that AB 257 will get signed by Gov. Gavin Newsom should the State Senate pass the bill. Despite his posturing as a nationally (more) progressive politician, it’s important to recognize Newsom’s family fortune derives from the hospitality industry.
California’s Department of Finance has come out against the legislation, saying it “could lead to a fragmented regulatory and legal environment for employers and raise long-term costs across industries.”
You can and should make sure that State Senator Toni Atkins knows that people support this bill. The text message I received from a group lobbying against AB 257 made it clear that Atkins was a target for their messaging.
Senator Toni Atkins
Constituent comment eform: https://sd39.senate.ca.gov/contact
Capitol Office
1021 O Street, Suite 8518, Sacramento, CA 95814
Phone: (916) 651-4039 * Fax: (916) 651-4939
San Diego District Office
1350 Front Street, Suite 4061, San Diego, CA 92101
Phone: (619) 645-3133 * Fax: (619) 645-3144
Email me at: WritetoDougPorter@Gmail.com