What you need to know about the FAST Act legislation

Assembly Bill (AB) 257 stands for The Fast Food and Accountability and Standards Recovery Act, or simply the “FAST Act”. The bill is moving through the California State Assembly and, if passed, would give the state’s fast food workers (and unions) additional influence over their work standards and rates of salary. The bill would also treat franchisees and franchisors as joint employers, sharing equal liability for violations of labor standards.

Related: Labor shortage? Depends on who you ask.

Committee governance

If AB 257 becomes law in California, it will call for the creation of an 11-person committee with the authority to draft and eventually enact new state labor standards for the QSR industry. The panel would consist of two union/worker representatives, two fast food workers, individuals representing franchisor and franchisee interests, and five additional members representing various state-level agencies.

Related: California votes to remove employee protections from Uber and Lyft drivers

Stakeout positions on both sides

AB 257 is undoubtedly pro-union in its aims, having drawn praise from the Service Employees International Union (SEIU), whose president described its stint as a “potential game-changer for reducing income inequality” in the how fast food workers are treated in California.

The International Franchise Association (IFA), meanwhile, takes a contrary view. He says the bill is “one of the most damaging pieces of legislation to ever impact the franchise business model.” The franchising industry’s most prolific trade group believes that AB 257’s joint employer definition exposes franchisors to increased liability in operating their businesses according to their proven models.

What happens next?

As this issue plays out in California, the passage of AB 257 could have far-reaching implications for how franchise owners conduct business in other states if a new precedent is set. The bill was up for a vote last July, but was defeated by just three votes. Now it’s another pass attempt, having passed through the California State Assembly in January of this year. The California Senate will be the next battleground, as the bill is due for review this spring.

Related: Solving the Labor Shortage for Small Businesses

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