Fast food workers in California will earn a minimum of $20 an hour starting in April 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 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, while 80% are minorities and two-thirds are women.

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

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)