Personal Finance

McDonald's Among Companies Trying To Stop California Minimum Wage Hike

In-N-Out, Chipotle, Starbucks, Chick-Fil-A, Panda Express, and Domino's are among several companies opposing the $22 an hour minimum wage increase.

A hiring sign displayed at a McDonald's restaurant.
A hiring sign displayed at a McDonald's restaurant.
Nam Y. Huh / AP

California voters will have a say next year on a law passed last year that would enact certain workplace standards at fast food restaurants as a petition was able to stop the law from going into effect.

Among the new standards, the law specifies that the minimum wage for fast food workers could go up to $22 an hour.

McDonald’s USA President Joe Erlinger said the bill would not help employees and could drive up costs by 20%. Additionally, a council that would include representatives from restaurants and franchises would be tasked with creating standards for working hours and minimum safety standards.

“As the head of McDonald's U.S. business and a native Californian, I've had reason to pay particularly close attention to the bill and how it passed. But the fallout from the legislation – and lessons to be learned here – matter to all of us, particularly as the Golden State tries to emerge as a model for the rest of the country,” he wrote.

McDonald’s is among several companies objecting to the law. According to state data, In-N-Out, Chipotle and Starbucks have all spent over $2 million to oppose the law. Chick-fil-A, Yum! Brands and McDonald’s have spent $1 million.

Explaining The Minimum Wage
Explaining The Minimum Wage

Explaining The Minimum Wage

Actual minimum wages vary from state to state. Changing the national minimum requires an act of Congress.


Lawmakers contend that the legislation goes beyond a minimum wage for workers. They say that fast food operators failed to protect workers during the COVID-19 pandemic.

“Despite guidance and protections for workers during the COVID-19 pandemic, a lack of protective equipment and social distancing and pressure to work at all costs has persisted,” said the state’s analysis of the legislation. A review by the Los Angeles Times of 1,600 federal OSHA complaints in the fast food industry during the pandemic found that regulators have been slow to intervene. ‘In response to those 1,600 COVID complaints over the course of the pandemic, inspectors have visited only 56 fast-food outlets, according to OSHA records.’”

Erlinger said he would welcome reforms that would provide meaningful workplace protections. He is also open to an increase in the minimum wage.

He said the bill carved out too many exceptions as it only applies to restaurants with 100 or more national locations. There are also exemptions which include places that bake bread onsite, in addition to establishments that act as grocery stores.

“We welcome and support legislation that creates an even playing field and applies to all industries and all workers. We support legislation that has clear, meaningful, positive and transparent outcomes for the broader community and our restaurant teams,” he said. “We applaud legislation that supports small business owners and the franchised business model – and does not impede our ability to engage with and meet the needs of employees and aligns with our values.”