Why Some CA Restaurant Owners Are Unhappy With The New Fast Food Law

California's FAST Recovery Act was signed into law by Governor Gavin Newsom in September 2022 (via the National Restaurant Association). The law created a council of 10 governor-appointed people to oversee regulations for wages, training, and health and safety standards for the state's fast food restaurants. The council will consist of eight fast food restaurant representatives, one representative from the Department of Industrial Relations, and one from the Governor's Office of Business and Economic Development, per National Law Review.

According to NBC, the current minimum wage for fast food employees in California is $15.50 per hour, but the new law would potentially raise that to $22 per hour by 2023. Employees will also reportedly be able to give their input on "future wages and working conditions," reports ABC 7. Though fast food employees may be celebrating the new law, it has divided restaurant owners and left some worrying about potential negative effects, while others think they will be relatively unaffected by it.

Over half of California restaurant owners are concerned about this new policy driving up food costs, according to a survey published by Restaurant Dive. As inflation continues to drive prices up, fast food restaurant owners are concerned about being able to keep menu pricing down in order to draw in customers. Some restaurants have already increased their prices, and worry that this law could amplify these cost increases.

Of those surveyed, 40% were reportedly also concerned about losing employees to a quick service restaurant (QSR) where they may be paid a higher hourly wage. One-third of the respondents also expect the law to impact their workforces negatively and 21% of owners believe that this law could lead to more automatic operations, like digital ordering screens in restaurants. Corporations like McDonald's, Starbucks, and Chipotle have reportedly raised money in an effort to overturn the law, opposing the proposed wage hike, reports the Wall Street Journal. On the other hand, 28% of the restaurant owners surveyed did not anticipate any major changes.