US-based multinational fast food chain McDonald’s Corporation has raised concerns over the fast food bill AB 257, known as the FAST Recovery Act, which was passed by the California state Senate earlier this week.
The bill would give a ten-person council the authority to increase the hourly minimum wage from $15.50 to up to $22 for a restaurant company with more than 100 locations across the US, CNBC reported
It also addresses issues such as unsafe working conditions and wage theft, wherein employees are not paid for their overtime.
In a letter published on the company website, McDonald’s US President Joe Erlinger has stated that the bill unfairly targets big restaurant chains.
According to Erlinger, a McDonald’s franchisee with two locations would come under the bill, given that it is part of a large national chain, while an owner of 20 restaurants that were not part of a large chain would be exempt.
In the letter, Erlinger wrote: “It imposes higher costs on one type of restaurant while sparing another. That’s true even if those two restaurants have the same revenues and the same number of employees.”
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He also added that the bill would require a single-location franchise owner of a large chain to pay their workers $22 per hour, which is 40% more than the present hourly wage in the state.
The new bill is to be signed by California Governor Gavin Newsom.
Companies would be required to raise the hourly wage rate as early as 2023.
The California FAST Recovery Act has also been opposed by the National Restaurant Association.
The National Restaurant Association president and CEO Michelle Korsmo said: “It’s rare that a state legislature passes a bill that would hurt small businesses, their employees and their customers, but California’s FAST Act does just that.
“Even the Governor’s own Department of Finance said AB 257 would increase costs. This comes at a time when inflation is at record highs and families are struggling every month.
“For restaurant operators, the FAST Act threatens businesses already contending with a 16% increase in wholesale food prices and ongoing supply chain challenges.”
McDonald’s has more than 13,000 locations in the US. It operates about 5% of these while franchisees own the remaining restaurants.