Update (September 11, 2023): A deal was reached by labor organizations and a business group that would repeal the FAST Act and implement some aspects of the law – most notably the minimum wage for some fast-food owners will increase to $20 per hour on April 1, 2024 and the regulations establishing joint-employer liability for franchisors and franchisees is removed. Our latest update on the law can be read here.

Update (January 2023): A Sacramento Superior Court Judge granted a preliminary injunction preventing the FAST Recovery Act from going into effect. As a result, the FAST Recovery Act will now be on the 2024 ballot for voters to approve or deny.  

AB 257, termed the Fast Food Accountability and Standards Recovery Act or the FAST Act, proposes to establish a Fast Food Sector Council to regulate California’s fast food restaurants.  The law was signed by Governor Newsom on September 5, 2022.  However, the following day, a coalition in opposition to the law started the process for a referendum of the Act.  On December 5, 2022, the coalition submitted over 1 million signatures in support of the referendum to qualify for the November 2024 ballot. 

Despite the signatures being submitted to the state, the Department of Industrial Relations said on December 27, 2022 that would continue to implement and enforce the law on January 1, 2023.  The coalition challenging the law filed a lawsuit seeking to stop the enforcement of the law while the signature verification process is underway. 

On January 13, 2023, the Superior Court of Sacramento held that the state could not proceed with enforcing the law while the referendum process was underway.  The court found “there is very little harm” to the state and the public in staying the implementation of AB 257 until the signature verification process is completed. The court explained, “The harm to California citizens and electors, in contrast, is great given the Court’s duty to ‘jealously guard’ the people’s right to referendum and the confusion that would occur if AB 257 were temporarily implemented while signatures were verified, and the confusion and uncertainty that could occur if the provisions of [AB 257] were to go into temporary effect.”

As noted by the court, the verification process of the signatures in support of the referendum is estimated to take until between January 27, 2023 and March 13, 2023.  The court’s injunction will remain in place until:

  1. The county elections officers and the Secretary of State determine that the referendum petition failed to contain sufficient valid signatures to qualify for the ballot or
  2. If the referendum qualifies for the ballot, AB 257 is approved by a majority of California voters at an election (which would be November 2024).

A copy of the court’s order can be read here: https://hrlaw.io/FastAct

The FAST Act is a paradigm shift on how regulations are implemented for an industry.   As we have explained previously, the council would 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 would have 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.  The council would be able to implement regulations more frequently than legislation, the council would only need 6 out of 10 people to pass regulations, and would be subject to less public oversight. Even if the FAST Act eventually becomes law, there are questions regarding whether the legislature has the power to delegate this authority to an unelected council.