The California Legislature passed an amended version of Assembly Bill (AB) No. 257 on August 29, 2022. The bill, sent to Governor Gavin Newsom, would create the Fast Food Sector Council. The Fast Food Accountability and Standards Recovery Act would provide increased rights to more than 500,000 fast-food workers in California.
The ten-member council would establish guidelines for salaryy, work hours, and working conditions for staff in fast-food restaurants with at least 100 establishments nationwide.
In comparison to earlier versions, the current bill has undergone considerable revisions. Most significantly, under a prior version, fast-food franchises would have been jointly and severally liable for wage and labor violations at franchisee locations. The present iteration of the labor-backed plan does not have such a clause.
Other changes to the law include clauses preventing the Fast Food Sector Council from mandating any new paid leave benefits for employees or controlling how fast-food restaurant owners set their employees’ shift schedules. The minimum wage may rise to $22 per hour in 2023 under the new bill’s provisions, and it would be adjusted for inflation in the coming years. Additionally, an expiration date of six years is included in the proposed bill, allowing lawmakers to evaluate its efficacy.
Controversial Reactions to the Governor Signing the Bill
On September 5, 2022, Governor Gavin Newsom proceeded to sign Assembly Bill (AB) No. 257. The Service Employees International Union (SEIU) backed the controversial bill. However, the decision faced criticism from groups, including the National Restaurant Association.
The vice president of the NRA, Sean Kennedy, warned that despite the governor signing the bill, the political fight against it is not over. According to him, the NRA will review all available remedies in the state for the 100,000 restaurants “proud to welcome Californians to their tables.” Until 10,000 California fast food workers sign a petition validating its existence, the 10-member fast food council will be restricted from issuing rules.
The International Franchise Association sent a strong message regarding the signature of AB 257. According to IFA President and CEO Matthew Haller, the governor favors special interests instead of Californians with small businesses. This will harm local businesses and underrepresented communities.
Haller believes that the FAST Act will go on to hurt the franchise business model in California. He reassures that the IFA will not cease to fight to ensure other states will not suffer from the harm that has begun in California.
AB 257 assumes that counter-service restaurants have worse working conditions than other businesses in the food industry. However, this is a fallacious premise, further supported by a review of the state’s data.
According to recent research from UC Riverside, AB 257 might result in price increases of up to 20% for restaurants in California. Less than one-third of Californians favor AB 257 because it will raise consumer costs and hurt local businesses. Furthermore, a recent study of American labor economists revealed that 83 percent of them oppose AB 257 because they are concerned about its effect on the expansion of the fast-food business, jobs, and price inflation.
Asides from the backlash from people affiliated with the restaurant industry, the governor’s decision was well-received by his supporters. Chris Holden thinks the bill will ensure marginalized workers are better represented in the workplace. As a former franchise owner, he believes this inclusivity will be beneficial to the workers and the franchise. “A franchise lawyer may be able to assist you in gaining knowledge about the new rights that could be available to fast food workers,” says corporate lawyer Jason Power of Franchise.Law.