Starting Monday, California fast food workers to benefit from new $20 minimum wage – here’s what you need to know.

Starting Monday, California fast food workers to benefit from new  minimum wage – here’s what you need to know.

THE YELLOW. BACK TO YOU. ALL RIGHT. GOOD TO KNOW. THANK YOU. WELL, A BIG CHANGE AFFECTING MILLIONS OF WORKERS IN CALIFORNIA KICKS IN TODAY. MOST FAST FOOD WORKERS WILL START GETTING PAID AT LEAST $20 AN HOUR. ALL THANKS TO A NEW LAW. WHILE IT WILL HELP MANY OF THOSE WORKERS WITH CALIFORNIA’S HIGH COST OF LIVING PRICES AT THOSE ESTABLISHMENTS COULD GO UP. AND THERE’S PLENTY OF CONFUSION OVER WHO THIS LAW ACTUALLY APPLIES TO. WE GO TO MELANIE WINGO. JOINING US NOW FROM NATOMAS WITH HOW A MINIMUM WAGE INCREASE AFFECTS THE RESTAURANTS AND CONSUMERS ACROSS THE STATE. GOOD MORNING. YES. STARTING TODAY, WORKERS AT THOSE BIG FAST FOOD RESTAURANT CHAINS WILL MAKE $20 PER HOUR FOR THEIR MINIMUM WAGE. AND RIGHT NOW, THAT REQUIRED WAGE INCREASE ONLY APPLIES TO PLACES THAT HAVE AT LEAST 60 ESTABLISHMENTS NATIONWIDE, WHERE CONSUMERS ORDER AND PAY FOR ITEMS BEFORE EATING AND DRINKING. ECONOMISTS DO EXPECT THIS TO AFFECT CONSUMERS AS MAJOR CHAINS LIKE MCDONALD’S, STARBUCKS, CHIPOTLE THEY HAVE ALL SAID PUBLICLY THAT THEY INTEND TO RAISE PRICES. NOW, SOME ECONOMISTS ANTICIPATE COSTS WILL GO UP BY ABOUT FIVE 5%. OTHERS SAY IT COULD BE AS LOW AS 2%. $5 MARK. THAT WOULD BE A DIME AND CENTS. PEOPLE NOTICE IT, BUT I DON’T THINK THEY’LL CHANGE THEIR BEHAVIOR. WE WILL, OF COURSE, AS EVERYONE ELSE IS, HAVE TO INCREASE PRICES IN SOME WAY, SHAPE OR FORM. AND WHAT PEOPLE DON’T UNDERSTAND IS THEY SAY, OH, WELL, IT DOESN’T REALLY MATTER. MCDONALD’S AND TACO BELL, THEY’RE JUST BIG CORPORATIONS. WE ARE FAMILY BUSINESS IS. YEAH. AS YOU HEARD THERE, SOME FRANCHISE OWNERS ARE EXPRESSING CONCERN THIS MORNING ABOUT THE NEW LAW, SAYING COVERING THE RISE IN LABOR COSTS PUTS THEM AT EXTREME PRESSURE. MEANWHILE, THAT PAY INCREASE IS IMMEDIATE. IT WILL NOT BE PHASED IN REPORTING LIVE IN NATOMAS MELANIE WINGO KCRA THREE NEWS. THANKS SO MUCH FOR THAT. LIVE REPORT TONIGHT. KCRA THREE CAPITOL CORRESPONDENT ASHLEY ZAVALA WILL TALK TO SOME SMALLER BUSINESS OWNERS, AND THEY ARE STILL TRYING TO UNDERSTAND IF THE LAW APPLIES TO THEM. WE’LL ALSO HEAR FROM WORKERS, LAWMAKERS AND EXPERTS ON THE NEW LAW THAT’S BEEN CLOUDED WITH CONTROVERSY AND QUESTIONS IN THE MONTHS LEADING UP TO IT TAKING EFFECT.

New $20 minimum wage for fast food workers in California starts Monday. Here’s what to know

Most fast food workers in California will be paid at least $20 an hour beginning Monday when a new law is scheduled to kick in giving more financial security to an historically low-paying profession while threatening to raise prices in a state already known for its high cost of living.Democrats in the state Legislature passed the law last year in part as an acknowledgement that many of the more than 500,000 people who work in fast food restaurants are not teenagers earning some spending money, but adults working to support their families.KCRA 3 Capitol Correspondent Ashley Zavala will explore the fast food law controversy Monday at 7 p.m. on KCRA 3. | Dig Deeper | What we know about Panera, Gov. Newsom, California’s new fast food worker law and NDAsThat includes immigrants like Ingrid Vilorio, who said she started working at a McDonald’s shortly after arriving in the United States in 2019. Fast food was her full-time job until last year. Now, she works about eight hours per week at a Jack in the Box while working other jobs.“The $20 raise is great. I wish this would have come sooner,” Vilorio said through a translator. “Because I would not have been looking for so many other jobs in different places.”| Related | Timeline: Everything we know about California’s new fast food minimum wage lawThe law was supported by the trade association representing fast food franchise owners. But since it passed, many franchise owners have bemoaned the impact the law is having on them, especially during California’s slowing economy.Alex Johnson owns 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, prompting him to lay off his office staff and rely on his parents to help with payroll and human resources.Increasing his employees’ wages will cost Johnson about $470,000 each year. He will have to raise prices anywhere from 5% to 15% at his stores, and is no longer hiring or seeking to open new locations in California, he said.“I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard,” Johnson said.“I have to consider selling and even closing my business,” he said. “The profit margin has become too slim when you factor in all the other expenses that are also going up.”Over the past decade, California has doubled its minimum wage for most workers to $16 per hour. A big concern over that time was whether the increase would cause some workers to lose their jobs as employers’ expenses increased.Instead, data showed wages went up and employment did not fall, said Michael Reich, a labor economics professor at the University of California-Berkeley.“I was surprised at how little, or how difficult it was to find disemployment effects. If anything, we find positive employment effects,” Reich said.Plus, Reich said while the statewide minimum wage is $16 per hour, many of the state’s larger cities have their own minimum wage laws setting the rate higher than that. For many fast food restaurants, this means the jump to $20 per hour will be smaller.The law reflected a carefully crafted compromise between the fast food industry and labor unions, which had been fighting over wages, benefits and legal liabilities for close to two years. The law originated during private negotiations between unions and the industry, including the unusual step of signing confidentiality agreements, KCRA 3 first reported. The law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide. Restaurants operating inside a grocery establishment are exempt, as are restaurants producing and selling bread as a stand-alone menu item.At first, it appeared the bread exemption applied to Panera Bread restaurants. Bloomberg News reported the change would benefit Greg Flynn, a wealthy campaign donor to Newsom. But the Newsom administration said the wage increase law does apply to Panera Bread because the restaurant does not make dough on-site. Also, Flynn has announced he would pay his workers at least $20 per hour.Read up on our coverage of the law and the controversy that has followedCalifornia fast food workers to get $20 minimum wage under new deal between labor and the industryReport: California’s fast food law exempts Panera because of Gov. Newsom’s relationship with billionaire franchiseeCalifornia Republicans want investigation into Newsom’s ties to Panera franchisee, new fast food lawCalifornia’s top prosecutor responds to accusations involving Newsom, Panera franchiseePanera franchisee Greg Flynn says his California restaurants will pay a minimum of $20 an hourNon-disclosure agreements were used in negotiations of California’s landmark fast food worker law’I think everyone’s concerned’: California lawmakers react to use of NDAs in fast food minimum wage lawCalifornia lawmaker introduces bill to prohibit NDAs in legislative negotiationsIce cream chain franchisee raises new questions about California’s fast-food labor law ___Beam reported from Sacramento, California.

Most fast food workers in California will be paid at least $20 an hour beginning Monday when a new law is scheduled to kick in giving more financial security to an historically low-paying profession while threatening to raise prices in a state already known for its high cost of living.

Democrats in the state Legislature passed the law last year in part as an acknowledgement that many of the more than 500,000 people who work in fast food restaurants are not teenagers earning some spending money, but adults working to support their families.

  • KCRA 3 Capitol Correspondent Ashley Zavala will explore the fast food law controversy Monday at 7 p.m. on KCRA 3.

| Dig Deeper | What we know about Panera, Gov. Newsom, California’s new fast food worker law and NDAs

That includes immigrants like Ingrid Vilorio, who said she started working at a McDonald’s shortly after arriving in the United States in 2019. Fast food was her full-time job until last year. Now, she works about eight hours per week at a Jack in the Box while working other jobs.

“The $20 raise is great. I wish this would have come sooner,” Vilorio said through a translator. “Because I would not have been looking for so many other jobs in different places.”

| Related | Timeline: Everything we know about California’s new fast food minimum wage law

The law was supported by the trade association representing fast food franchise owners. But since it passed, many franchise owners have bemoaned the impact the law is having on them, especially during California’s slowing economy.

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Alex Johnson owns 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, prompting him to lay off his office staff and rely on his parents to help with payroll and human resources.

Increasing his employees’ wages will cost Johnson about $470,000 each year. He will have to raise prices anywhere from 5% to 15% at his stores, and is no longer hiring or seeking to open new locations in California, he said.

“I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard,” Johnson said.

“I have to consider selling and even closing my business,” he said. “The profit margin has become too slim when you factor in all the other expenses that are also going up.”

Over the past decade, California has doubled its minimum wage for most workers to $16 per hour. A big concern over that time was whether the increase would cause some workers to lose their jobs as employers’ expenses increased.

Instead, data showed wages went up and employment did not fall, said Michael Reich, a labor economics professor at the University of California-Berkeley.

“I was surprised at how little, or how difficult it was to find disemployment effects. If anything, we find positive employment effects,” Reich said.

Plus, Reich said while the statewide minimum wage is $16 per hour, many of the state’s larger cities have their own minimum wage laws setting the rate higher than that. For many fast food restaurants, this means the jump to $20 per hour will be smaller.

The law reflected a carefully crafted compromise between the fast food industry and labor unions, which had been fighting over wages, benefits and legal liabilities for close to two years. The law originated during private negotiations between unions and the industry, including the unusual step of signing confidentiality agreements, KCRA 3 first reported.

The law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide. Restaurants operating inside a grocery establishment are exempt, as are restaurants producing and selling bread as a stand-alone menu item.

At first, it appeared the bread exemption applied to Panera Bread restaurants. Bloomberg News reported the change would benefit Greg Flynn, a wealthy campaign donor to Newsom. But the Newsom administration said the wage increase law does apply to Panera Bread because the restaurant does not make dough on-site. Also, Flynn has announced he would pay his workers at least $20 per hour.

Read up on our coverage of the law and the controversy that has followed

___

Beam reported from Sacramento, California.

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