What restaurants can expect under California's resurrected plan for setting restaurant wages

Working Lunch: The Industrial Welfare Commission has until October 2024 to issue its recommendations for changing pay within specific trades. Here's how that process will work.

With the Fast Act on hold, labor advocates in California have quietly figured out another way to raise the wages of the state’s restaurant workers. This week’s Working Lunch political-affairs podcast takes a detailed look at how that alternate model should work.

It is not a new system. As guest and California Restaurant Association legal counsel Ben Ebbink explains during the installment, the Industrial Welfare Commission has been around for 110 years. Yet it was unable to execute its mission—resetting the wages and working conditions for specific industries—for about the last 20 because the state legislature had cut off its funding.

Lawmakers voted about two weeks ago to appropriate a multi-million-dollar budget for the Commission again, and Gov. Gavin Newsom signed the bill into law.

The Commission now has the authority and wherewithal to once again raise the minimum pay for about 17 industries abounding in entry-level workers. The restaurant business is one of the trades.

“Conceptually, it makes a lot of sense,” Ebbink said during the podcast. “It doesn’t make sense to have a one-size-fits-all approach to wages. Each industry has unique nuances and issues.”

But, he acknowledged, the restarted Commission is likely to weigh more than what is fair pay for industries where at least 10% of the workers are at or below the poverty line. “It’s a very political animal,” he commented.

The re-funding of the Commission has been widely attributed to intense lobbying by the Service Employees International Union, or SEIU, the group that hammered the Fast Act into law. That measure would create a 10-person panel with the power to set wages and working conditions for employees of fast-food restaurants that are part of a chain with at least 100 branches nationwide. Workers and union advocates would control 40% of the voting power.

The Act is on hold until the 2024 elections, when California voters will be asked if they'd like enforcement of the Act to proceed.

The Industrial Welfare Commission is chartered to resume its wage-setting function in January, with any recommendations for pay increases within the 17 or so covered industries due in October.

To learn what might transpire in the meantime, and what those activities could mean for restaurants, download the episode from wherever you get your podcasts.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


It's time to send 'ghost kitchen' to the graveyard

Tech Check: The catch-all term for delivery restaurants is no longer accurate. Let’s lay it to rest and come up with a new label.


Higher-end consumers may be slowing their spending

The Bottom Line: There is some evidence that higher-income consumers may be cutting back. Or maybe there was just some pent-up demand.


Wonder bets meal kits aren't dead yet

Tech Check: By acquiring the struggling Blue Apron, the restaurant delivery concept believes it can touch more dining occasions. But will it work?


More from our partners