Newsom Signs Fast Food Standards and Accountability Recovery Act

On Labor Day, Gavin Newsom signed the Fast Food Standards and Accountability Recovery Act – Assembly Bill 257 – giving the state’s 550,000 fast food workers a seat at the table and bargaining power.

In his signing statement Newsom said the new law “gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry. I’m proud to sign this legislation on Labor Day when we pay tribute to the workers who keep our state running as we build a stronger, more inclusive economy for all Californians.”

In the process of passing this law, the legislature specifically found that “For years, the fast food sector has been rife with abuse, low pay, few benefits, and minimal job security, with California workers subject to high rates of employment violations, including wage theft, sexual harassment and discrimination, as well as heightened health and safety risks.”

The legislature went on to establish its remedy. This new law will establish the Fast Food Council within the Department of Industrial Relations until January 1, 2029. It will be composed of 10 members to be appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe its powers.

The 10 members include one from the Department of Industrial Relations. Two representatives of fast food restaurant franchisors. two representatives of fast food restaurant franchisees. Two representatives of fast food restaurant employees. Two representatives of advocates for fast food restaurant employees. And one representative from the Governor’s Office of Business and Economic Development.

The code defines a “Fast food chain” to mean “a set of 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.”

The purpose of the council is to establish sectorwide 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.

If a conflict exists between council’s standards, rules, or regulations and those issued by another state agency, the standards, rules, or regulations issued by the council would apply to fast food restaurant workers and fast food restaurant franchisees and franchisors, and the conflicting rules or regulations of the other state agency would not have force or effect with respect to these parties.

The Act would except from this application proposed standards within the jurisdiction of the Occupational Safety and Health Standards Board and would prescribe a process for the council to petition the board to adopt, amend, or repeal a standard.

The council must submit a report to the Legislature for a standard, or repeal or amendment of a standard, to become effective, and would specify that a standard, repeal, or amendment shall not take effect before October 15 of the same year.

A fast food restaurant operator is prohibited from discharging or in any manner discriminating or retaliating against any fast food restaurant employee for specified reasons, and would create a cause of action and right to reinstatement for employees in this connection, as well as a presumption of unlawful discrimination and retaliation in certain circumstances.

The law received widespread support from labor unions and worker advocacy organizations, with Mary Kay Henry, the president of the Service Employees International Union (SEIU), arguing that the bill addresses “challenges that workers have faced when trying to change policies by unionizing store by store.”

The law was opposed by franchise owners, fast food companies and the California Restaurant Association. Joe Erlinger, the President of McDonald’s posted an open letter which opposed the law, and he claimed “Economists say it could drive up the cost of eating at a quick service restaurant in California by 20% at a time when Americans already face soaring costs in supermarkets and at gas pumps.”

Newsom Signs Fast Food Standards and Accountability Recovery Act

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