On September 11, 2023, the coalition of California businesses announced its agreement with labor unions to withdraw their referendum challenging Assembly Bill (AB) 257, which created the FAST Recovery Act, from next year’s ballot.

Last year, Governor Newsom signed AB 257. The Act established a Fast Food Council comprising fast food employees, worker advocates, franchisors, franchisees, and government officials from the Department of Industrial Relations and the Governor’s Office of Business and Economic Development.

Almost immediately, a referendum effort was launched which would give California voters the opportunity to reject the measure.

While AB 257 was paused pending the referendum, the California legislature proceeded with reviving the Industrial Welfare Commission, seen as the state’s attempt to push through similar efforts to increase regulations and expansion of union involvement in industries such as the fast-food industry. In addition, another bill, Assembly Bill (AB)1228, was introduced. That bill would have imposed liability on franchisors for violations of the Fair Employment and Housing Act, the Labor Code, Cal/OSHA, and other workplace laws as well as exposing franchisors to liability under the Private Attorneys General Act.

In exchange for withdrawing the referendum on AB 257, AB 1228 was significantly revised. The amended bill does not include franchisor liability but instead resurrects the Fast Food Council that was originally included in AB 257.

As with AB 257, the amended AB 1228 would give the Fast Food Council the authority to set minimum employment standards for fast food restaurants, including wages, hours, health and safety, and other working conditions. It would set an initial minimum wage of $20 per hour effective April 1, 2024, and permit the Council to establish further increases based on increases to the Consumer Price Index. The bill as amended would also permit local jurisdictions to establish more protective labor standards but would preclude them from setting wages different from those set by the Council. The Council’s authority would sunset on January 1, 2029.

AB 1228 has not made its way out of the legislature and has only until midnight on September 14 to be sent to the Governor. However, in light of the agreement between the two sides, it is expected the bill will make its way to Governor Newsom and be signed.

If you have questions about the FAST Recovery Act or related issues, contact a Jackson Lewis attorney to discuss.

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Photo of Laura A. Pierson-Scheinberg Laura A. Pierson-Scheinberg

Laura A. Pierson-Scheinberg is a principal in the San Francisco, California, and Baltimore, Maryland, offices of Jackson Lewis P.C and is the leader of the Retail industry group.

Laura represents employers in labor and employment matters, with a particular focus on traditional labor…

Laura A. Pierson-Scheinberg is a principal in the San Francisco, California, and Baltimore, Maryland, offices of Jackson Lewis P.C and is the leader of the Retail industry group.

Laura represents employers in labor and employment matters, with a particular focus on traditional labor issues, union elections and unfair labor practice charges. She has extensive experience in collective bargaining, from serving as chief spokesperson to developing strategy behind the scenes. Laura’s background includes bargaining for both large and small clients from a local to a national level in a wide range of industries, including, but not limited to, manufacturing, retail and healthcare. When recessive bargaining and labor-management disputes become strikes, she has worked with her clients to develop contingency plans and strike preparedness. She also has experience with government contractors subject to the Service Contract Act.

Photo of Benjamin A. Tulis Benjamin A. Tulis

Benjamin Tulis is a principal in the Los Angeles, California, office of Jackson Lewis P.C. His practice focuses on advice and counsel within the labor and employment law sector. Ben is a member of the California Advice and Counsel resource group.

Ben counsels…

Benjamin Tulis is a principal in the Los Angeles, California, office of Jackson Lewis P.C. His practice focuses on advice and counsel within the labor and employment law sector. Ben is a member of the California Advice and Counsel resource group.

Ben counsels employers on a host of employment issues, including wage and hour laws, leaves of absence, employment-related agreements, incentive plans, independent contractor classifications, exempt/non-exempt classifications, company policies, reductions in force, workplace investigations, employee discipline, litigation avoidance and helping employers address legal developments on the fly as they arise. Ben assists employers with a wide variety of employment-related agreements, including but not limited to employment agreements, confidentiality agreements, commission agreements, incentive plans, contractor agreements, severance agreements, arbitration agreements and various other agreements with employees and third parties. Ben helps employers develop incentive arrangements, including commission arrangements with industry-specific compliance issues.