AB 257 Signed Into Law
I don’t know who your favorite Addams Family member is, but I’m fairly certain, dear readers, that it’s Wednesday… at least today.
Greetings from beautiful Lake Tahoe dear readers! The air is thick with the smell of cigarettes, the floor is littered with eternal optimists nervously trying to “make back what [they] lost so they can at least break even,” and your humble blogger is here, jumping from one side of the border to the other madly chanting “Now I’m in California, now I’m in Nevada, now I’m in California again.” This magical place never gets old!
But since you’ve made the commitment to visit the blog or open your e-mail, I owe you some news which I am not exactly thrilled to deliver. Governor Newsome, in an effort to make a meal less affordable for Californians, has signed the disastrous AB 257 into law.
This will allow the state of California, through a council, to increase wages for fast food restaurants which are part of a “fast food chain” consisting of “100 or more establishments nationally that share a common brand or that are characterized by standardized options for décor, marketing, packaging, products, and services” up to $22 per hour. Just for reference, the general minimum wage in California is set to reach $15.50 per hour on January 1, 2023.
Aside from making fast food either ridiculously expensive or unprofitable to the point that it would no longer be available, especially when being provided by smaller franchise groups, it’s also going to drive up costs on workers’ comp TD and PD benefits.
Imagine if this council raises a fast food employee’s wages up to $22 per hour from $15 per hour. Aside from the fact that the employer is being squeezed without any respect for its own rights, a full-time employee working at $15 per hour has an average weekly wage of $600, but an employee making $22 per hour for those hours has an AWW of $880 per hour. The $280 difference per week yields an additional $186.67 per week in TD benefits.
Adjusters should keep this in mind as applicants out on TD can very well be awarded increases based on a raise in base-wage by operation of AB 257.
Likewise, employers and supervisors should keep a regular and open line of communication with their claims adjusters to advise them when a particular location is struck by this council, so that the defense can avoid penalties and interest and, of course, audits by California.
Until next time, dear readers!