The California Senate and state Assembly passed Assembly Bill 257 on Monday — also known as the Fast Food Accountability and Standards Act or the FAST Recovery Act — which would create a state-run fast-food council that would set standard wages, working hours and conditions for employees of quick-service chains with 100 or more locations nationally.
Though the FAST Recovery Act initially failed in the Assembly, after some amendments and a passage the second time around, the legislation now heads to Gov. Gavin Newsom’s desk for signing. The new version of the bill tweaked several measures of the original legislation to be a bit more pro-business, including a minimum wage ceiling off $22 per hour for 2023. Newsom has not indicated if he would pass the bill, and it was initially criticized for having “significant ongoing costs” by the state Department of Finance.
“Creating a stakeholder driven council ensures that all voices at the table are heard and considered,” state assemblymember and co-author of the original bill, Chris Holden, said in a statement. “This innovative template helps us do better to foster improved working environments for all Californians.”
If the bill is passed by Gov. Newsom, the fast-food council would be established within the Department of Industrial Relations and would consist of 10 members appointed by the Governor. Their term would last until Jan. 1, 2029, and the council would establish state-wide standard working conditions for fast-food workers, subject to a petition signed and approved by 10,000 state fast-food workers.
The FAST Recovery Act has been met with pushback from the business community, which has criticised the bill for creating untenable standards for the restaurant industry, including the possibility of a $22 state-wide minimum wage, which could raise menu prices by 20 percent.
Joe Erlinger, president of McDonald’s USA has stated that the Act should raise alarm bells across the country as it unfairly imposes higher costs on one type of restaurant, while sparing another.
“If you are a small business owner running two restaurants that are part of a national chain, like McDonald’s, you can be targeted by the bill,” Erlinger explained.
“But if you own 20 restaurants that are not part of a large chain, the bill does not apply to you. For unexplainable reasons, brands with fewer than 100 locations are excluded. Even more mystifying, the legislation excludes certain restaurants that bake bread. I can only conclude this is the outcome of backroom politicking.”
State Republican lawmakers have come out against the bill, saying that it gives “unchecked power” to this fast-food council, which would be appointed by the Governor’s office, and would include both workers and industry representatives.
Although the council would specifically target larger chains, the International Franchise Association argues that many franchisees of these chains are smaller businesses and it would be just as challenging for them to keep up with these new standards, as it would be for an independent restaurant operator.
