A California bill seeks to hold fast-food corporations like McDonald’s and Burger King responsible for labor violations in the state. If AB 257 passes, the bill’s provisions will allow workers and the state to hold fast-food chains responsible for issues like wage theft and overtime pay. At the moment only franchisees can address these issues directly.
The bill could provide service workers and unions in California more power against fast-food corporations. It’s also part of a larger bill backed by unions to more strictly regulate fast-food chains, reported CalMatters, a nonprofit news organization in California. In a typical franchise model, wages, hours, and labor conditions are often left to the franchisee, according to the outlet, suggesting that workers need support at the individual store level, as well.
The bill’s language also allows a franchisee to sue a restaurant chain if the franchise contract contains strict terms that leave them no choice but to violate labor law. Those terms could be related to store hours or the employment status of workers, said Mario Herman, a lawyer in DC, specializing in franchise matters. AB 257 also includes a measure to create a state-run council to set wage and labor standards across the service industry.
What will this mean for service employees in California?
It’s hard to say whether these changes will directly improve workers’ conditions, but what’s clear is this would force corporations into the open. Recently, Chipotle agreed to pay $20 million in compensation to 13,000 workers in New York City for violating rights around scheduling and paid sick leave. “The franchisors will not be able to hide behind franchisees with anti-labor policies and practices, forcing the franchisees to do their dirty work,” said Herman. “The franchisors will be exposed directly to the wrath of workers who will be able to sue the franchisors directly for labor violations, and thereby hold them accountable.”
Though these multimillion-dollar corporations have the money to pay for big lawyers to defend them, Herman said “[y]ou’re chilling the franchise org from doing anything illegal because they can be held responsible.”
Extending liability to corporations is necessary in enforcing wage and labor laws, according to labor advocates.
Whether making fast-food companies responsible for labor violations would spread outside of California if AB 257 passes is not clear. The bill also points to the broader challenge of linking labor problems at the subcontractor or supplier level to larger companies, which is often evident in the fashion industry.
The bill comes as the pandemic has put a spotlight on workers’ conditions in the service industry, particularly, as many restaurant workers have quit their jobs to find better work in regards to pay and benefits.
California state senators will vote this month on AB 257.