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California Fast-food Accountability and Standards Recovery Act Takes Effect

On September 5, 2022, the governor signed the California Fast-food Accountability and Standards Recovery Act (FAST Recovery Act) which will create a Fast-Food Council (Council) within the Department of Industrial Relations (DIR). The purpose of the Council is to establish sector wide minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast-food restaurant workers.

Council Authority

The 10-member Council will have the authority to set employment standards for fast-food restaurants, including but not limited to wages, working conditions and training. The Council will remain in place until January 1, 2029 and will also provide retaliation and health and safety protections. A Council-established minimum wage cannot be more than $22 per hour from January 1, 2023, to December 31, 2023 and on January 1, 2024, and the highest minimum wage can only increase by 3.5 percent or the annually adjusted federal consumer price index (CPI), whichever is less.

The Council cannot create new paid time off benefits like paid sick leave or paid vacation, and it also will not be permitted to establish regulations related to predictive scheduling. Further, the Council will not be permitted to encroach on the jurisdiction of the California Occupational Safety and Health Standards Board but is permitted to petition for the adoption, amendment or repeal of any occupational safety and health standard.

Covered Establishments

The bill defines the characteristics of a fast-food restaurant, including that the establishment be 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.

Exempt Establishments

Excluded from the Act are eateries that operate within grocery stores and bakeries are not considered fast-food restaurants and are excluded from the legislation. Also excluded are any employees whose employment is covered by a valid collective bargaining agreement (CBA) that expressly provides for the wages, hours of work and working conditions of the employees, and a regular hourly rate of pay that is no less than 30% more than the state minimum wage for those employees (if the agreement offers equivalent or greater protection than the Council’s standards).

Enforcement

Fast-food operators will be prohibited from retaliating against employees for asserting their rights under the law. The standards will be enforced by several state agencies, including the California Labor Commissioner and Civil Rights Department. This bill will require the Council to conduct a full review of the adequacy of minimum fast-food restaurant health, safety, and employment standards at least once every three years.

Next Steps for Employers

It is unclear by what date covered employers would be expected to comply as the Council still needs to develop and communicate applicable employment standards, including standards on wages, working conditions, and training, and to issue, amend and repeal any other rules and regulations, as necessary to carry out its duties.

Employers may need to work with their legal counsel to determine whether they fall within the scope of the law as the Act’s current definition of fast-food restaurants creates uncertainty on whether AB 257 impacts some chain employers that are traditionally not viewed by the public as fast-food restaurants.

HR Works will continue to monitor this topic and provide updated information as needed.

HR Works, Inc., headquartered at 200 WillowBrook Office Park in Fairport (Rochester), New York, with an office in East Syracuse, is a human resource management outsourcing and consulting firm serving clients throughout the United States. HR Works provides scalable strategic human resource management and consulting services, including: affirmative action programs; benefits administration outsourcing; HRIS self-service technology; full-time, part-time and interim on-site HR managers; HR audits; legally reviewed employee handbooks and supervisor manuals; talent management and recruiting services; and training of managers and HR professionals.