On September 5, 2022, California Governor Gavin Newsom signed the Fast Food Accountability and Standards Recovery Act (the “FAST Act”). Once it goes into effect, the FAST Act will permit the California state government to appoint a 10-member Fast Food Council composed of representatives from the state and various segments of the fast food industry. The Council will have broad powers to establish minimum standards for employees working in “Fast Food Restaurants,” one of which is the ability to set the minimum wage for those workers. Unions strongly supported the law, which will potentially impact more than 500,000 fast food workers in California, their employers, and consumers. This article will briefly address some of the main points of the FAST Act.
Who is Covered?
The new legislation applies to “Fast Food Restaurants”, which are part of “Fast Food Chains”.
According to the FAST Act, “Fast Food Restaurants” provide food for “immediate consumption either on or off the premises” for customers who select and pay for items before eating and where the restaurant prepares items in advance. The law does not apply to restaurants with table service. In addition, the FAST Act exempts certain bakeries and grocery establishments.
Additionally, to be covered by the Act, a “Fast Food Restaurant” must be part of a “Fast Food Chain.” A “Fast Food Chain” is a set of restaurants consisting of 100 or more establishments nationally that share a common brand or are characterized by standardized options for décor, marketing, products, and services.
Finally, the Fast Food Council will only have jurisdiction over non-unionized fast-food restaurants. Since the Act exempts unionized restaurants, those establishments will not have to abide by the Council’s standards.
What Powers Will the Fast Food Council Have?
The Fast Food Council will have broad powers to establish sector-wide minimum standards on wages, working hours, and other working conditions required to maintain Fast Food Restaurant workers’ health, safety, and welfare. However, the Fast Food Council will not be permitted to promulgate standards creating new paid time off benefits, such as paid sick leave or paid vacation, or regulations regarding scheduling.
Potentially the most powerful element of the FAST Act is that it gives the Fast Food Council the power to raise the hourly minimum wage for fast food workers to as much as $22 per hour. If enacted, the result would be an almost 50 percent increase over the statewide minimum wage of $14 or 15 per hour, depending on company size. On January 1, 2024, and each year after, the minimum wage may increafastse by the lesser of 3.5 percent or the rate of change in the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers.
The FAST Act also provides that any county or city with a population of at least 200,000 people may establish a local fast food council and make recommendations to the Fast Food Council regarding minimum state health, safety, and employment standards.
How Will the Fast Food Council Enforce its Standards?
The Division of Labor Standards Enforcement will enforce the standards established by the Fast Food Council. Further, the FAST Act creates a cause of action for discrimination or retaliation against any fast food worker and creates the right of reinstatement. That means that any employee of a Fast Food Restaurant terminated or discriminated/retaliated against in violation of the FAST Act will have the right of reinstatement, treble damages for lost wages and benefits, and attorney’s fees.
First, the FAST Act may not become law. Following the enactment of the FAST Act, restaurant owners began to mobilize in opposition and, on September 6, 2022, filed a “Request for Title and Summary for Proposed Referendum” with the California Attorney General. Following the submission, the Attorney General’s Office will facilitate a 30-day public review process. Following the public review and multiple other steps involved in passing a law in the State of California, including public hearings and signature gathering, if enough signatures are gathered, the Act will be stayed until California voters decide it in a future election. More than 600,000 votes will be required to force the FAST Act to a state referendum.
On the other hand, the FAST Act could become law in January.
If so, the new law will complicate compliance for Fast Food Restaurants in California. Additionally, the expected minimum wage increase (and cost to comply with additional workplace standards) will drive up operating costs. The law also strengthens labor unions and their related organizations to set wages and other working conditions for an entire economy sector. Finally, other states may follow these developments and consider implementing similar regulations.
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About Harrison Oldham
Harrison grew up in Mansfield, Texas. He attended Texas A&M University for his bachelor’s degree, where he met his wonderful wife, Kelsey. After graduating magna cum laude from Texas A&M, he attended SMU Dedman School of Law, graduating with honors in 2012. Today, Harrison and his wife live in Dallas, Texas with their son, Teddy.
Since graduating from SMU Law, Harrison has worked exclusively in the field of business law. He has spent time in private practice and in-house, working with clients of every size; from single person startups to Fortune 250 companies. Today his practice focuses on serving the diverse needs of businesses and individuals throughout Texas. You can learn more about Harrison by visiting his website, at: http://