Fast food chains team up to strike down California law on new minimum

McDonald’s, Starbucks, Chipotle Mexican Grill and other major restaurant chains are teaming up to spend millions of dollars to try to overturn a new California law that could set the state’s minimum wage for the fast food industry by as much as $22 an hour next year.

The “Save Local Restaurants” coalition said on Friday that it had raised $12.7 million to fight the bill, known as the “Fast Recovery Act.”

Corporate brands contributed $9.9 million and individual franchisees donated $2 million, including KFC and McDonald’s chain owners. Trade associations account for the rest, according to the coalition. “Californs will bear the cost of this new law, so it’s only fair that they say whether it should be upheld,” said Matthew Haller, president of the International Franchise Association.

Gavin Newsom, a spokesman for the governor of California and a Democrat who signed the “Fast Recovery Act” into law on Sept. 1, declined to comment.

McDonald’s contributed about $360,000, while several individual franchisees in the chain donated thousands of dollars each separately. Burger King, Subway and Domino’s Pizza donated $250,000 each, while Wendy’s contributed $150,000, the file shows.

California’s current minimum wage is $15 an hour and is expected to increase by 50 cents next year. The law requires California to create a ten-person council, including workers, union representatives, employers and business advocates, that could set a minimum wage for fast food workers next year of up to $22 and annual adjustment based on inflation.

The law would apply to fast food chains with more than 100 locations across the country. It also prohibits operators from retaliating against employees who make complaints and establishes a framework for reinstatement of back pay or employment for those who do so.

Opponents will need to submit about 623,000 valid voter signatures by Dec. 4 to suspend the law and qualify for a referendum in the November 2024 vote, according to the state.

Referendum supporters often spend millions of dollars in California to gather the signatures needed to get into the polls and typically need to collect more than the minimum, as election officials can disqualify some.

Law advocates also need to collect signatures from 10,000 fast food restaurant employees to officially establish the council. The Service Employees International Union, which is expected to play a big role in collecting signatures, declined to comment on its efforts.

Source: Dow Jones Newswires.