California would become the first state to establish a fast food council charged with setting pay and workplace standards for the entire industry under a bill the Legislature is poised to send to Gov. Gavin Newsom.
Assembly Bill 257, also known as the FAST Act, passed the Senate on Wednesday in a 21-12 vote. It now returns to the Assembly for final confirmation on amendments before heading to Newsom’s desk. The governor has not stated a position on the bill. But his Department of Finance released a report in June opposing the measure. The analysis cited significant ongoing costs and a “fragmented regulatory and legal environment for employers.”
Under the legislation, a 10-member council composed of workers, employers and government appointees would negotiate to set industry standards and pay. It would apply to any fast food chain with at least 100 locations nationwide. The council would be a first in America’s fast-food industry.
Advocates say such wage theft and other exploitation is common in the industry, particularly for women and racial minorities who make up more than the state’s half-million fast food workers.
Some workers and union advocates gathered in the Capitol rotunda and cheered when the deciding vote was cast.
“It will be effective because it gives employees and franchisees a voice and setting the rules and it creates a structure in which all stakeholders have a venue to collaborate on workplace solutions,” said Sen. María Elena Durazo, D-Los Angeles.
In the days leading up to the Senate vote, Assemblyman Chris Holden, D-Pasadena made several amendments to alleviate concerns of lawmakers. Previously, fast food companies would have been legally responsible for any labor violations at individual stores even if individual stores were owned by franchisees.
A six-year sunset date was also added to measure, meaning that the progress of the council will be assessed in six years and the law could expire.
Fast food companies say bill will create higher prices
Fast food companies and franchisee owners continue to lobby against the bill. Among those in opposition include the California Restaurant Association and the International Franchise Association. They note that the state already has strict worker protections, and establishing a commission with this power is an overstep.
“By supporting this bill, lawmakers are choosing to hand over their legislative authority to put it in the hands of government bureaucrats and organized labor with no accountability,” said Matt Haller, CEO and president of the International Franchise Association. “Instead of enforcing existing law or providing additional support for the rigorous worker protections already in place in California, this bill creates unworkable standards for business owners and unaffordable prices for customers who are already suffering.”
Opponents also contends the bill would lead to higher prices, furthering the dangerous inflation that is already striking the economy.
Last month, UC Riverside Center for Economic Forecast and Development released a study showing the double-digit consumer cost increases that are expected as a result of the bill. The analysis found costs can increase up to 20%.
“We can expect a very sharp increase in food costs from the affected restaurants, and that could push these families to the breaking point, given the financial pressures working families already feel from rising rents, gas and other necessities,” said Christopher Thornberg, director of the UC Riverside Center for Economic Forecast and Development at the time.
Fast food workers celebrate bill
Workers and union leaders rallied in celebration of AB 257 after it passed the Senate, giving emotional speeches in English and Spanish and singing along to mariachi music.
“This is a huge victory,” said Lorena Gonzalez, head of the California Labor Federation. “I want to thank all the workers who put themselves on the line, who kept working through the pandemic so that we could eat, put themselves in a terrible situation that they should never have had to, and now finally will have an opportunity to affect their workplace conditions at the table with a strong union beside them.”
Workers wearing red shirts and holding red and yellow AB 257 signs surrounded the speakers, who stood near yellow inflatable clenched fists that said ‘worker power.’ One demonstrator waved a purple and yellow flag that said ‘Fast food justice ¡ahora!’
“What today showed us is no matter who’s trying to hold us down, whether it be billion-dollar corporations, whether it be conservative electeds that don’t care about workers, nothing can stop us,” said Joseph Bryant, Service Employees International Union international executive vice president. “When we unite, when we fight, we will win.”
Durazo and Holden also celebrated with workers in between votes.
“Bills like this don’t happen by themselves,” Holden said. “It takes commitment, it takes those who have the fortitude to come to a place like this to let your voice be heard, to show up in the hallways, to show up at offices, letting everybody know who had a vote in there today just how important and who this vote was going to benefit.”