As a franchise business owner, new employment, labor, and wage laws are especially impactful for the workplaces you operate. If you own multiple franchises, regulatory changes can impact hundreds, if not thousands, of employees across your locations.
California’s Assembly Bill 257 (AB257) is one change that will affect many franchise businesses, particularly those in the state’s fast food industry. Because the law creates a new regulatory council, it likely means compliance requirements will continue to evolve.
In this blog, we’ll break down everything you need to know about California’s AB257 and what you’ll need to do to meet regulatory requirements.
AB257 — also known as the Fast Food Accountability and Standards (FAST) Recovery Act — was approved by California Governor Gavin Newsom on September 5, 2022. The law stipulates two major changes for California’s fast food industry.
AB257 establishes two different types of fast food councils:
While the law doesn’t require individual counties or cities to establish Local Fast Food Councils, it does make it legal for jurisdictions to do so. Local councils report to the statewide council, and the latter will stipulate how local councils will be formed and their duties.
But which businesses will the AB257 Fast Food Council(s) oversee? The bill defines a fast food franchise as a company with 100 or more establishments nationwide that share at least one of the following:
Per the bill, a “fast food restaurant:”
If your fast food franchise meets the definitions above, it is subject to both AB257 and any regulations enacted by the statewide Fast Food Council.
The AB257 Fast Food Council will create and maintain fast food restaurant employment standards related to:
The council must also conduct a full review of fast food franchise health, safety, and employment standards at a minimum of every three years. These findings must be reported to the Department of Industrial Relations, the Governor, and the California Legislature.
Importantly, the council can also make revisions, amendments, or additions to fast food labor laws, but these regulation changes only become law if they’re supported by a petition with at least 10,000 signatures from fast food workers.
Any regulations issued by the council will supersede conflicting regulations issued by other state agencies.
Per AB257, the statewide Fast Food Council will have ten members, each serving a four-year term:
All positions are appointed. The Governor will appoint the representatives for state agencies, fast food owners/franchisors, franchisees, and employees, as well as one council chairperson. The Speaker of the Assembly and the Senate Rules Committee will each appoint one advocate for fast food restaurant workers.
According to AB257, the council is required to meet or hold hearings at least once every six months. These meetings will be open to the public — including fast food workers — and will provide an opportunity for public opinions to be heard regarding fast food restaurant issues.
Public meetings represent a significant win for fast food workers in California who face unionization barriers and labor law challenges. However, they also provide fast food franchise business owners an opportunity to be heard.
While California’s Department of Industrial Regulations currently requires a $15.00 per hour minimum wage for businesses with 26 or more employees (and $14.00 per hour for companies with 25 or fewer), the statewide Fast Food Council has the power to create a new minimum wage that can override the current law.
But, there are two important limitations to note:
AB257 will primarily impact three groups:
Franchises subject to AB257 who are found non-compliant can expect significant fines and penalties. Although some definitions and rules have yet to be finalized by the council, franchises need to begin preparing now because they will likely go into effect quickly once decided.
Moreover, the longer you wait to become compliant, the more difficult and costly it will be. This is because California can assess retroactive fines for compound violations, and the created Fast Food Council is expected to continually make new rules.
Preparation for AB257 compliance should begin with evaluating your current HR compliance obligations.
In the face of changing regulations posed by AB257, how should your fast food franchise business respond? Let’s break down four critical actions you can take now.
Your initial HR compliance assessment will go much smoother and achieve better results with the right partner. Working with BBSI to prepare for AB257 compliance gives you access to:
Right now, the Fast Food Council’s composition and authoritative scope are known, but their forthcoming rules aren’t. So, it’s extremely beneficial to have a partner who can help you navigate the changes to come.
While the law doesn’t require business owners to notify their employees of regulatory changes or council activities, keeping your workforce informed is a show of good faith.
Now that the bill has passed, consider:
Remember, your Labor Law Posters must include the minimum wage. So, if the council does update the minimum wage, make sure your posted literature reflects current information to remain compliant.
Now that AB257 has passed, the Fast Food Council will begin conducting public meetings every six months, providing an excellent opportunity for you and your staff to get more involved with the statewide fast food industry.
Attending the meetings isn’t required. But, by attending regularly, you could:
It might also be beneficial to encourage employees to attend or listen in on the meetings. With more information about the industry in which they work, employees may discover a sense of empowerment to advance their careers or advocate for quality improvements in their workplaces — both of which are positive contributions to your business.
Depending on where you live, your franchise locations, and the statewide council’s chosen meeting place, it might not be feasible to be deeply involved in the legislative process.
The solution? Get involved with your local council.
While the statewide council will stipulate regional councils’ responsibilities and operations in time, keep your ear to the ground for potential developments that could impact your business.
You can help your local council (and reap the benefits described in the previous section) by:
Ultimately, you and your employees can be as involved as you’d like in local and statewide council proceedings, but the more you engage, the more likely your voice will be heard as the councils make changes that could impact your business.
AB257 may not significantly impact your business yet, but the creation of the Fast Food Council and the bill’s changes to minimum wage processes have the potential to affect your operations significantly.
As laws change, you deserve a partner in your corner who can help you make decisions about compliance, create positive change in your workplace, and stay competitive in an ever-changing industry. BBSI can provide all of the above — and so much more.
BBSI’s commitment to helping companies grow sets us apart from other providers. No matter which services you’re looking for, we’ll match you with a Business Unit Team with the capabilities to take your brand to the next level.
In your search for a worker’s comp, HR, or benefits administration partner, don’t settle for the bare minimum — choose BBSI and discover the value of partners who care.