AB 257, new law to protect fast food workers, on hold until November 2024

Assembly Bill (AB) 257, the Fast Food Accountability and Standards Recovery Act or FAST Recovery Act, enacted in September 2022, is on hold until the November 2024 election.

AB 257 creates a 10-person council to set rules for chains with 100 or more restaurants nationally. It can set the minimum wage for fast-food workers with an upper limit of $22 an hour.

On Tuesday, Jan 24, California Secretary of State Shirley Weber, Ph.D., officially announced that the proposed referendum had officially garnered the requisite number of signatures to qualify for the ballot. Consequently, pursuant to state law, AB 257, although passed in both the Assembly and Senate, and signed by Gov. Gavin Newsom in September, is in abeyance until voters decide on the referendum challenging it.

AB 257 establishes a 10-member unelected body (the Fast Food Sector Council) that will have authority to establish industrywide standards on wages, working hours and other working conditions, related to the health, safety and welfare of employees, that would be applicable to the entire fast food industry. This council’s proposals will come before the Legislature and would take effect unless lawmakers specifically step in to prevent it from taking effect.

About 623,000 signatures were needed to qualify the referendum for the November 2024 ballot. A coalition called Save Local Restaurants, whose biggest funders are In-N-Out Burger, Chipotle and Starbucks, submitted more than a million signatures. The Secretary of State’s staff reviewed the signatures. Based on a random sampling of about 50,000 signatures, they determined that, at least 712,000 signatures were legal, thus qualifying the referendum.

In a statement after Weber’s announcement, Save Our Restaurants said, “California voters have made clear that they want a say on whether they must shoulder the burden of higher prices and job losses caused by the FAST Act. This legislation singles out the quick service restaurant industry by establishing an unelected council to control labor policy, which would cause a sharp increase in food costs and push many Californians, particularly in disenfranchised communities, to the breaking point. During the highest inflation in more than four decades, consumers want to know that the restaurant meals they need in their busy lives will continue to be affordable, and that the jobs their communities rely on will still be there. Before they lose the brands that they love, voters will get the chance to have their say.”

AB 257 defines a fast-food restaurant as an establishment that is “part of a set of fast food restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services.”

Decisions affecting this portion of the restaurant industry would undoubtedly affect all other portions of the industry in some way, according to Sean Kennedy, executive vice president for public affairs of the National Restaurant Association. “The FAST Act is bad policy that threatens not only quick service restaurants, but the independents operating in the same neighborhoods. There is no way that the regulations passed by this unelected council would not damage the state’s restaurant industry, harm its workforce, and leave diners paying the bill,” he said.