Tomorrow's Hospitality A-Z – Navigating the future

Employment icon

Read time: 8 minutes

California Gov. Gavin Newsom on September 5, 2022, signed into law AB 257, the Fast Food Accountability and Standards Recovery Act (FAST Act), which creates an unelected Fast Food Council to set minimum standards that affect the terms of employment for fast-food restaurant chains with 100 or more locations nationally and at least one in California. The FAST Act is union-backed and is said to be part of a larger effort to unionize the restaurant industry in California.

Opponents of the FAST Act quickly filed for a voter referendum on September 7, 2022, to thwart the bill before it was to take effect on January 1, 2023. They had 90 days from the date of the bill’s enactment to collect the number of signatures required to qualify for a ballot measure. California’s Department of Industrial Relations (DIR) acknowledged receipt of the signatures and it is currently validating that the requirements for a referendum have been met.

Notwithstanding, California announced its intent to proceed with the adoption of the FAST Act as of January 1, 2023, despite the constitutional requirements under California law, that a measure being put to a referendum vote be suspended until ballots are cast by the public. The coalition “Save Local Restaurants,” comprised of businesses and restaurant trade groups, filed a lawsuit in Sacramento Superior Court on December 28, 2022, to “ensure the democratic process established by the California Constitution is respected.” It asserts that it submitted more than 1 million unverified signatures this month, well above the required minimum to initiate a referendum, and that putting the law into effect would set a “dangerous precedent” that threatens voters’ right of referendum.

On January 13, 2023, the Superior Court of Sacramento ruled that the FAST Act must go through the referendum process before going into effect. County officials have until January 25, 2023 to verify signatures. If the signatures are verified, the next step is to put the proposed legislation to a vote.

The FAST Act establishes an unelected 10-member Fast Food Council within the California Department of Industrial Relations (DIR) that is authorized to set new minimum standards concerning the minimum wages, working hours, and other health and safety conditions of a fast-food chain with at least 100 establishments nationwide (and at least one in California) that (1) share a common brand or are characterized by standard décor, marketing, packaging, products and services; and (2) are fast-food restaurants, which are defined as establishments that provide food or beverages for immediate consumption on or off premises to customers who order and pay for food before eating, with items prepared in advance (including items that may be prepared in bulk).

Key takeaways
  • If implemented, the FAST Act will authorize an unelected council to set standards such as minimum wages, working hours and other conditions of employment.
  • The Act will apply to fast-food chains with at least 100 establishments nationwide.
  • Opponents received sufficient signatures for a November 2024 referendum and county officials have until January 25, 2023 to verify the signatures.
  • Once verified, the legislation will be put to a vote in November 2024.
Download full report
Download full report