How Some Restaurants Are Complicating California's New Fast Food Law

On Labor Day 2022, California passed a new law that's meant to give fast-food workers more of a say regarding the terms of their employment. The Fast-Food Accountability and Standards Recovery (FAST) Act establishes a 10-person council, which will include four fast-food workers and advocates on their behalf, to set those terms of work, including a new standard minimum wage to which the entire industry will be expected to adhere or face criminal charges (via California Legislature). Although the dollar amount hasn't been set, many estimate it will be the $22/hour maximum that the new law allows for in 2023, with an anticipated 3.5% increase each year until 2029.

Many fast-food workers are nothing short of thrilled, according to ABC 7. Others believe the new law, which the U.S. Chamber of Commerce asserts is tantamount to empowering unelected bureaucrats to micromanage the fast-food industry, stands to do serious harm. Critics argue that the law may potentially increase the cost of doing business for fast-food restaurateurs and could end up hurting workers. Indeed, fast-food operators were pushing back even before the bill's passage. And now that the bill has become law, some restaurants are taking steps to complicate the law's start date (via SF Chronicle).

California's new fast-food law goes into effect on January 1 (per SF Chronicle), unless a new coalition of restaurant industry advocates has their way, per QSR. A group of like-minded restaurateurs have banded together with community organizations, trade organizations, some consumers, and even some fast-food restaurant workers to form the Protect Neighborhood Restaurants coalition (PNR). The coalition's swift action in the aftermath of the bill's passage into law stands to complicate, delay, and even potentially derail the new law from going into effect.

On September 6, just one day after California Gov. Gavin Newsom signed the fast-food bill into law, the PNR officially filed a request with the state to have a referendum placed on a general election ballot to end the FAST Act, per QSR. If the request is approved, PNR will have under 90 days to gather more than 632,212 signatures (which represents 5% of the total votes in the 2018 California gubernatorial election). If PNR can accomplish that feat, then the referendum will appear on the 2024 general election ballot.

Given that a recent poll indicated fewer than a third of residents support the new law, PNR believes it will be successful. Supporters of the FAST Act, including union leaders and fast-food employees, maintain the referendum initiative is an attempt to circumvent the legislative process.