California's fast-food worker law suspended until general election

The public will decide the fate of the unprecedented legislation

California's fast-food worker law suspended until general election

California fast-food workers will have to wait almost two years to see if they’ll receive unprecedented power in the industry.

California Secretary of State Shirley Weber has certified that the referendum seeking to overturn Assembly Bill 257 gathered sufficient valid voter signatures.

As a result, California voters will now decide whether the Fast Food Accountability and Standards Recovery Act (aka the “FAST Recovery Act”) will go into effect.

The issue will be on the ballot during the general election on Nov. 5, 2024.

The legislation is supposed to enact specific workplace rules and standards for fast-food companies with 100 or more restaurant locations nationwide. The law authorizes the creation of the Fast Food Council, comprised of representatives from labor and management to set minimum standards for wages, conditions related to health and safety, security in the workplace, the right to take time off from work for protected purposes and protection from discrimination and harassment.

Under the law, the council could’ve raised the minimum wage for fast-food workers up to $22 per hour on January 1, 2023. Every year thereafter, the council can bump up the minimum wage by the lesser of 3.5% or the increase in the Consumer Price Index (CPI). 

The law was slated to go into effect at the dawn of this year, but a court blocked its implementation earlier this month.

The development came after a report from The New York Times detailed how ServSafe – which provides an online class in food safety for $15 per worker – doubles as a fundraising arm of the National Restaurant Association, which lobbies to keep restaurant workers’ wages low.

The NRA previously opposed the FAST Recovery Act, saying: “The bill only creates walls and hurdles for both restaurant owners and workers when there are strict regulations already in place.” The higher wage mandate alone, said the group, could “raise costs for California quick service restaurants by $3 billion.”

“Essentially, AB 257 provides a form of sectoral bargaining without requiring employees to organize and form a union,” says Kaleb Berhe, a Los Angeles-based labor and employment associate at Foley & Lardner LLP.

Sectoral bargaining, which is common in Europe, is a form of collective bargaining that extends negotiated wages, benefits and workplace standards across an entire occupation or industry. “Despite being ‘cut out’ of the picture, unions have heavily backed this initiative from the start, reasoning that it provides protections to employees in an industry that has historically proven difficult for unions to reach,” Berhe told HRD.

The law also creates a private right of action for employees to bring retaliation and discrimination claims on the basis of a broad category of protected activities, including reporting workplace health and safety concerns, participating in meetings with the council or its local counterparts, and refusing to work because of a “reasonable belief” in potential workplace health and safety violations.   

Additionally, the council will be able to amend or repeal any rules or regulations “as necessary to carry out its duties.” If there’s a conflict between established state or local rules and the rules issued by the council, the council’s rules will supersede. The 10 council members will be appointed by the governor, the speaker of the assembly and the Senate Rules Committee. 

The law has faced heavy opposition from fast-food corporations, such as Newport Beach, CA-based Chipotle, Irvine, CA-based In-N-Out Burgers, San Diego-based Jack in the Box and Chick-fil-A, as well as Restaurant Brands International Inc., the parent company of Burger King and Popeyes, and Yum Brands, Inc., which owns Irvine, CA-based Taco Bell, KFC and Pizza Hut, The Los Angeles Times reported.

The California Restaurant Association, California Chamber of Commerce and other regional business advocacy organizations have also opposed the law, claiming it will lead to higher labor costs and ultimately higher costs for customers.

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