News You Need to Know in Two Minutes

The 2025-26 legislative session has officially begun, welcoming 36 new lawmakers to the state Capitol. The CRA Advocacy Team is already connecting with these fresh faces to address key restaurant-related issues. Lawmakers will return to Sacramento the first week of January, and the formal introduction of bills has already started. Notable updates include Senate Bill 17, which proposes a tax exemption for tips, and Senate Bill 22, which revisits the rules for cashing out gift cards.

Election results highlight voter concerns about rising costs, with California rejecting an annual minimum wage increase (Prop 32) for the first time in a nearly 10-year run. Local tax measures saw mixed outcomes and recalls indicating voter frustrations. Republicans gained ground in the legislature, while a new session begins December 2. The CRA is actively engaging with lawmakers to advocate for neighborhood restaurants. Plus, prepare for the January 1 ban on polystyrene foodware due to unmet recycling targets.

Election week is behind us, and we are awaiting the final results. The CRA supported Proposition 36 and opposed Proposition 32, both of which are still being counted. While we wait, we notice another concerning trend: the decline in commercial insurance coverage options. Many of you have expressed worries about the limited choices and increased business insurance costs.

The legislative session concluded with many notable victories, reflecting the impact of our industry’s collective advocacy. Several misguided bills were successfully opposed and stopped, including those proposing unjustified warning labels on decaffeinated coffee and the general prohibition of reasonable employer communication to employees outside of working hours. These outcomes- and the other major victories we have told you about already- underscore the significance of engagement and support in shaping positive legislative results.

Our industry has seen many victories, but we still need to make it over the finish line. Sept. 30 marks the deadline for when the governor signs or vetoes the bills that passed the legislature. Until that deadline, the CRA will stay active on a handful of essential bills. SB 969, a CRA-supported bill, is one that aims to restore downtowns still hurting from the pandemic by allowing local governments to establish “entertainment zones” where restaurants can sell alcohol for street fairs, festivals, and other outdoor public events.

The upcoming November 2024 ballot will include Proposition 32, which aims to increase the minimum wage to $18. The statewide minimum wage has increased nine out of the last ten years and is currently $16. Over the past three years, prices have increased by more than 20% and Prop. 32 will continue to raise costs for family-owned businesses and force small employers to increase prices. In fact, Prop.32 has been pegged to cost state and local governments billions of dollars. These facts- current voted sentiments- and no meaningful support campaign make Prop.

S.B. 1272 proposes turning restaurant-branded gift cards into generic cash cards. This means businesses would be obligated to give cash to anyone who asks to exchange their gift card for cash, as long as the balance is $25 or less. This bill would impose extra costs and security risks on businesses, as they must keep more cash on hand to comply with the proposed law. Stay tuned for an Action Alert, which will allow you to voice your opposition to this law to lawmakers.

The effort to regulate indoor workplace temperatures began in 2017, and the CRA and our board of directors were directly involved with Cal/OSHA throughout the process. While that direct engagement helped shape the regulation to add some added flexibility for restaurants- complying with the regulation will still be a heavy lift. The Cal/OSHA Standards Board has now adopted the final regulation. Pending an expedited review by the Office of Administrative Law, the regulation could come into effect as early as August.

Two significant legislative victories have been achieved, thanks to our collective efforts. The reform of the Private Attorneys General Act (PAGA), a goal we’ve been striving towards for years, has finally been realized with the signing of SB 98 and AB 2288. This success is a testament to the collaborative work of the California Restaurant Association (CRA), the Fix PAGA Executive Committee, the Governor’s Office, and labor, who have all played a crucial role in achieving a meaningful PAGA reform.

The lawsuit-first approach of PAGA has proven to be a failure for employees, small businesses, non-profits, and others. The CRA and several other CA trade associations have tirelessly worked to qualify a PAGA Reform measure of utmost importance—the Fair Pay and Employer Accountability Act—which will appear before voters on the November 2024 ballot.

Last week, the CRA led a large group of California operators on Capitol Hill for a day of advocacy. Those critical meetings allowed California operators the opportunity to meet with members of Congress from all over the state, but in their Washington, D.C. offices. It was a productive and wonderful week where our neighborhood restaurants were able to amplify the call for change on two of the biggest national restaurant priorities of the year: lowering swipe fees for credit card processing and stopping the FTC’s restrictions on standard restaurant pricing models.

Last year, AB 1228 was signed into law, which established the Fast Food Council. The Council has regulatory authority over various restaurant concepts, such as fast-casual and quick-serve, as well as franchise and non-franchise models. It has regulatory power over counter-service restaurants that have over 60 locations nationwide. The Council’s goal is to set minimum working condition standards. However, the Council’s authority is broad.

The CRA has been involved in environmental policy at both the state and local levels for many years working to reduce environmental footprints, while being sensitive to operator challenges. Some of the more recent efforts include helping create a statewide model to reduce the distribution of single-use foodservice accessories and a separate effort to help create a robust, statewide process to review- and approve- food packaging products for use throughout the state.

Join the nation’s largest grassroots advocacy event for restaurants! Registration for the National Restaurant Association’s Public Affairs Conference is now open this April. Restaurant operators from all over the nation will head to Capitol Hill to lobby Congress to lower swipe fees and reject the Federal Trade Commission’s proposal to eliminate your discretion on whether to have service or other mandatory fees as part of your pricing structure.

The state legislature has resumed its session, and has until February 16th to propose new legislation. Last year, 3,028 proposed new laws were seen. Last week, Governor Newsom announced that the state is facing a budget deficit of approximately $38 billion. The state budget process will take place between now and July 1st and will play a crucial role in determining what new legislation California will see. The CRA will remain involved in those deliberations and will continue to safeguard local restaurants.

This year, there were some significant statewide victories in various forms. Many of these victories were due to the engagement of our restaurant community, and we want to express our gratitude for your support. AB 1217 has reduced red tape and costs for restaurants seeking to maximize their outdoor dining footprint. This law extends the life of the restaurant relief into future years. SB 533 was amended to better suit the industry at large when it comes to implementing workplace safety and violence prevention plans, thanks to tremendous lobbying efforts.