Groundbreaking FAST Recovery Act Signed by Governor!

Among the first bills signed into law by Governor Newsom for 2023, AB 257, known as the Fast Food Accountability and Standards Recovery Act ("FAST Recovery Act") is unprecedented legislation, creating a council to set wages, working hours, and other working conditions for fast food restaurant workers at establishments with 100 or more locations across the nation.

According to John Swarbrick, Director of Labor Relations for CEA, what makes FAST unprecedented is that this is the first time a state has legislated to mandate sectoral collective bargaining. Sectoral collective bargaining is a type of collective bargaining that extends negotiated wages, benefits, and other terms and conditions of employment across an entire occupation or industry within a certain geographic area. This approach represents a radical shift from the traditional model of enterprise-based bargaining, in which unions negotiate with individual employers over the terms and conditions of a group of employees at a particular worksite. One of the main arguments for sectoral bargaining is that it extends minimum compensation floors to all workers in a particular industry irrespective of the size of the business; whether it is unionized or not; or the legal structure of the enterprise. Organized labor has long struggled with the process of trying to organize large groups of employees in organizations with multi-site operations such as Starbucks, where union organization must be conducted on a store-by-store basis.

Read the key details below to learn more about this watershed legislation:

• Fast Food Council: Until January 1, 2029, the Fast Food Council (FFC) within the Department of Industrial Relations will be comprised of 10 appointed members to regulate wages, working hours, and safety/health requirements.
• Covered Employers: The law will apply to those defined as 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 (i.e., including franchisees).
• Anticipated Wage Raises: The FFC is authorized to set minimum standards on wages, capped at $22 an hour for 2023 (and future limits are set annually at the lesser of 3.5% or the rate change set by the U.S. Bureau of Labor Statistics).
• Anti-Discrimination/Retaliation: Prohibits covered employers from discharging, discriminating, or retaliating against an employee for defined protected activity, such as filing certain complaints, participating in FFC proceedings, or refusing to engage in health/safety violations. There is a rebuttable presumption of wrongdoing if the employer takes adverse action against the employee within 90 days after they have knowledge the employee engaged in protected conduct.
• Expect Future Challenges: Opponents argue the Legislature is not authorized to delegate its lawmaking authority over setting such standards, rules, and regulations to an unelected body. Additionally, there is already a proposed referendum measure that, if successful, would give California voters the opportunity to reject the law on the November 2024 ballot. 

While the legality of AB 257 will undoubtedly be challenged in the courts (and perhaps on the ballot as well), the adoption of it by the Governor represents a significant victory for organized labor and creates a model that they will push to see extended into other sectors and occupations. This new law has the potential to expand the reach of organized labor exponentially.

What else is new in the world of wage and hour regulations? Join us at our comprehensive Wage and Hour Webinar on September 13! Register here.