Governor Newsom signed AB 257, termed the Fast Food Accountability and Standards Recovery Act or FAST Recovery Act, on Monday, September 5, 2022.  The new law establishes a Fast Food Sector Council to regulate California’s fast food restaurants.  The council will be composed of 10 members who are not elected, but are appointed by the Governor, Speaker of the Assembly, and the State Rules Committee.  The council has the power to set standards for minimum wages, working hours, “and other working conditions related to the health, safety, and welfare of” fast food establishments.  California employers in the fast food industry must review the new legislation closely to see if their establishments are covered by the FAST Act.  Here are some key components of the new law:

AB 257 regulates “fast food chains”

The new law defines “fast food chain” as “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.”

AB 257 applies to “fast food restaurants”

The law also only applies to fast food restaurants, which is defined as:

“Fast food restaurant” means any establishment in the state that is part of a fast food chain and that, in its regular business operations, primarily provides food or beverages in the following manner:

(1) For immediate consumption either on or off the premises.

(2) To customers who order or select items and pay before eating.

(3) With items prepared in advance, including items that may be prepared in bulk and kept hot, or with items prepared or heated quickly.

(4) With limited or no table service. Table service does not include orders placed by a customer on an electronic device.

Permits the council to increase the minimum wage for fast food workers to $22 per hour by January 1, 2023

The law permits the council to set standards for minimum wages, maximum hours of work, and other working conditions for fast food restaurant employees.

The law permits the council’s ability to increase minimum wage for restaurant workers, and requires that any minimum wage set by the council can be as high as $22 per hour between January 1, 2023 to December 31, 2023.  Thereafter, the minimum wage can increase at the less of 3.5% or the rate of change set by the U.S. Bureau of Labor Statistics.

If on January 1, 2029, the council is no longer operative, the minimum wage set for fast food restaurant employees in effect on December 31 shall be increased by the lesser of 3.5% or the rate of change set by the U.S. Bureau of Labor Statistics.

The law requires the council to meet at lease once every 6 months.

“Working conditions” is defined by the law to “include, but are not limited to, wages, conditions affecting fast food restaurant employees’ health and safety, security in the workplace, the right to take time off work for protected purposes, and the right to be free from discrimination and harassment in the workplace.”

The law permits “Local Fast Food Councils”

A county, or a city with a population of greater than 200,000, may establish a Local Fast Food Council.  These local councils have the ability to provide recommendations to the council.

Protects employees who disclose information to “watchdog or community based organizations”

The new law also prevents a fast food restaurant operator discharging or retaliating against any employee if the employee made a complaint or disclosed information to the media, or to a “watchdog or community based organization” regarding employee or public health or safety.

Also, employers may not take adverse actions against employees if “[t]he employee refused to perform work in a fast food restaurant because the employee had reasonable cause to believe that the practices or premises of that fast food restaurant would violate worker or public health and safety laws.”

The law deleted the aspect of the law that made franchisors jointly liable for franchisees’ violations

The final version of the law deleted language from the bill that would hold franchisors jointly liable for franchisees’ violations.