Understanding the Fast Recovery Act

This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.

In the last few years, the restaurant industry has shifted and grown in monumental ways. From the lasting impact of COVID-19 to the rise in tableside payment technology, each moment has had a unique effect on the industry, and it’s important to stay up to date on the next moment that could impact your business. For restauranteurs in California, the Fast Recovery Act is shaping up to be just that.

The Fast Food Accountability and Standards Recovery Act, also known as the Fast Recovery Act or AB 257, was signed into California law in September 2022 by Governor Gavin Newsom. The act intends to regulate the working standards of fast-food workers in the state, which totals more than a half million people alone.

Similar legislation and guidelines are emerging across the country, such as Seattle’s new labor standards law for domestic workers and Detroit’s proposed ordinance regarding wages, benefits, and working conditions across industries, all of which reflect shifts in working conditions and expectations across industries.  

Here’s what you need to know about the Fast Recovery Act:

What is the Fast Recovery Act?

The Fast Food Accountability and Standards Recovery Act is a law that gives an unelected 10-member council of political appointees, labor union representatives, food industry officials, and fast-food workers — collectively called the Fast Food Council — the ability to create regulations that impact how quick-service restaurants do business. The act gives the Fast Food Council the power to regulate workplace health and safety, workplace protections, minimum wage increases, and more. 

Minimum wage: The minimum wage can be increased up to $22 per hour for 2023 with an allowance of a 3.5% increase each subsequent year. In California, the current minimum wage ranges between $14 and $15 per hour (set to increase to $15.50 in 2023). The federal minimum wage is $7.25 per hour. The act also allows the council to investigate wage-related claims for fast food employees, such as loss or theft.

Workplace health and safety: The council would review fast-food restaurant health, safety, and employment standards at least once every three years. In addition, the council is required to hold meetings open to both the public and fast-food restaurant employees every six months to hear issues regarding fast-food restaurant health, safety, and employment conditions. 

Workplace protections: Fast-food restaurant operators may be prohibited from firing, discriminating, or retaliating against employees who make claims or reports regarding employee or public health and safety; employees may be entitled to job reinstatement and payment of lost wages when fired in an act of retaliation.

Notably, there’s an amendment preventing the council from creating regulations around paid sick leave and paid vacation.

What exactly is the Fast Food Council?

The Fast Food Council is an unelected body that will have the ability to set regulations over counter service restaurants in regards to minimum wage, workplace health and safety, and workplace protections without consulting the California Legislature. 

The California Department of Industrial Relations (DIR) must first receive a petition of at least 10,000 fast-food workers approving the creation of the Council before they could work to establish any new regulations.

The Council would be comprised of:

Governor Newsom has the power to appoint the representatives of state agencies, fast-food restaurant employees, fast-food restaurant franchisors, and franchisees. The Speaker of the Assembly and the Senate Rules Committee will each appoint one representative of an advocate of fast-food employees.

Upon the approval of the petition, the Council will meet every six months until January 1, 2029. Each member of the Council will serve a term of four years.

How does the Fast Act define a fast-food restaurant?

According to the Fast Recovery Act, a fast-food restaurant is a set of restaurants consisting of 100 or more establishments nationally that share a common brand or are characterized by standardized options for décor, marketing, packaging, products, and services. The act goes on to define a fast-food restaurant as a restaurant that provides food or beverages for immediate consumption in the following manner, including:

Restaurants located within grocery stores that operate as an extension of the store (i.e., employees employed by the grocer) are excluded from the legislation. Restaurants where employees are covered by a valid collective bargaining agreement or union are also excluded. 

When does the Fast Recovery Act go into effect?

The Fast Recovery Act is currently scheduled to go into effect on January 1, 2023. However, there is the possibility for a statewide referendum that will refer the Fast Recovery Act back to voters and suspend its implementation until voters have a say in the November 2024 election.

While the Fast Recovery Act is currently only applicable to the state of California, staying up to date on the latest developments from lawmakers in your state can help you make informed decisions regarding your restaurant(s) and how to best manage your staff and your workplace as the industry continues to evolve.

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