A Sacramento County Superior Court judge has temporarily halted AB 257, after a restaurant group sued the Secretary of State, the Attorney General and the director of the California Department of Industrial Relations.  The law, which sets new rules on wages and labor standards in the fast-food industry, was set to be enacted on January 1st, 2023. 

AB 257: The Fast-Food Accountability and Standards Recovery Act  

The law would establish, until January 1, 2029, the Fast-Food Council (“Council”) within the Department of Industrial Relations (DIR), to be composed of 10 members appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee, and would prescribe the Council’s powers. The purpose of the Council would be to establish industry-wide minimum standards as to wages, working hours, and other working conditions related to workers’ health, safety, and welfare, as well as promoting interagency coordination and prompt agency responses in this regard. The law would define the characteristics of a fast-food restaurant, including that the establishment be part of a set of 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. 

Governor Gavin Newsom signed the bill on Labor Day, 2022 and stated that “Today’s action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry.” 

Fast Act Temporarily Halted in December 

A group of restaurant trade associations and franchises, called “Save Local Restaurants”, sued California directors and the Attorney General to delay the law. Save Local Restaurants claims that it has enough signatures for a voter referendum on the law and the law should not be enacted until voters can decide if they wish to keep it. 

The DIR sent a letter stating it believes the law should be enacted now and would only be put on hold if the signatures for a referendum are verified. A California referendum on the law requires 623,000 signatures. 

Fast Food Wage and Hour Complaints 

California had a minimum wage of $15.00 as of 2022, which rose to $15.50 as of January 1st, 2023. 

The Fast Act law would enable the Fast-Food Council, within the Department of Industrial Relations, to raise minimum wages for fast food workers, to as high as $22 an hour, in 2023.  In the years after, the Fast-Food Council can raise the minimum wage again up to 3.5% or by the change in the U.S. Consumer Price Index (CPI). 

Restaurants and the service industry are well-established areas where minimum wage violations commonly occur, as well as violations to fully pay hourly workers for all hours worked, overtime, or missed meal breaks.  If you have a wage violation to report, contact the employment lawyers at Schneider Wallace at 1-800-689-0024 or info@schneiderwallace.com.