The fast-food industry is marked by low-wages, few benefits, and high rates of employment law violations. An estimated 550,000 Californians worked in the industry in 2019. Most earn close to the minimum wage. Eight out of ten fast-food workers in the state are workers of color, and six out of ten are Latinx. Two-thirds are women. While fast-food workers are younger than workers as a whole, the vast majority (77%) are over the age of 18.
The Fast Food Accountability and Standards Recovery Act, AB 257, would create a Fast Food Sector Council charged with establishing industry-wide minimum standards on wages, working conditions, and training in the industry. The council would hold hearings once every six months and review the standards at least once every three years.
Passage of the bill would also make fast-food franchisors jointly liable for violations of state employment laws. The fast-food industry is largely organized through a franchise model. Franchisors hold the economic power in the relationship and exert significant control over franchisees operations—dictating price, suppliers, and customer rules—which incentivize poor labor conditions.
The effect of AB 257 on workers’ wages and benefits, as well as its effectiveness in reducing wage theft, depends on the actions taken by the council. If the council raises the wage floor for fast-food workers and reduces wage theft it would create savings to the state budget through decreased utilization of state safety net programs as well as increased tax revenue.