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


Trend or fad? These restaurant currents could go either way

Reality Check: A number of ripples were evident in the business during the first half of the year. The question is, do they have staying power?


Starbucks' value offer is a bad idea

The Bottom Line: It’s not entirely clear that price is the reason Starbucks is losing traffic. If it isn’t, the company’s new value offer could backfire.


Struggling I Heart Mac and Cheese franchisees push back against their franchisor

Operators say most of them aren't making money and want a break on their royalties. But they also complain about receiving expired cheese from closed stores. "Don't send us moldy product."


More from our partners