California fast-food workers to earn minimum of $20 an hour under new law

(Reuters) -Fast-food workers in California will earn a minimum of $20 an hour and have a greater say in setting workplace standards under a new bill signed into law on Thursday by Governor Gavin Newsom.

"The future happens here first," Newsom said at an event in Los Angeles, with labor officials and fast-food workers flanking him.

The legislation emerged as part of a broader compromise in which fast-food companies agreed to remove a 2024 ballot referendum asking voters to repeal a law aimed at improving wages and working conditions for employees.

Labor unions, meanwhile, dropped their push to hold fast-food corporations liable for violations committed by their franchisees.

The median fast-food worker in the U.S. earned $13.43 an hour in 2022, while those in California made an average of $16.60 an hour, according to the Bureau of Labor Statistics. The new minimum, which takes effect in April, equates to an annual salary of $41,600.

There are more than 550,000 fast-food workers at 30,000 locations statewide, Newsom said. The majority are the primary providers for their families - contrary to the perception that fast-food workers are teenagers in their first jobs - while 80% are minorities and two-thirds are women, he added.

"We're not just about growth," he said. "This state is about inclusion."

In addition to the higher wages, the law also establishes a "Fast Food Council" including representatives for both workers and employers that can approve further pay increases and set standards for working conditions, in what labor leaders hailed as a historic move.

The overall minimum wage in California is $15.50 an hour, among the highest of any state. The federal minimum wage, which has remained unchanged since 2009, is $7.25 an hour, or $15,080 a year for an employee working 40 hours a week.

(Reporting by Joseph Ax; Editing by Josie Kao and Rami Ayyub)