California's Divisive FAST Act Is Being Put On Hold. Here's Why

According to Zippia, the average fast food worker makes $11.95 an hour or about $24,860 per year. As food costs, housing, and general living expenses overall continue to rise, some governmental agencies have sought to standardize the minimum wage. In 2022, the California Senate passed the FAST Act, which proposed "minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers," (per Market Realist). Both proponents and opponents of the bill vocalized their opinions on the enactment of this law, which could impact not just the workers' wages but also consumers' food costs and franchisees' operating costs.

ABC10 reported that Assembly Bill 257, aka FAST Act, would take effect on January 1, 2023. The legislation could have raised the minimum wage as high as $22 per hour. According to the legislation, the 10-person special counsel would work towards wage standards, improved working conditions, and other employment-related issues. Prior to the temporary enactment of the law, Save Local Restaurants Coalition filed against the State of California and requested an injunction until a referendum was verified and California residents could vote on the specific law. As reported by QSR, the FAST Act has been paused until the referendum process is completed. Depending on signature verification, the proposed law could be placed on the California ballot in November 2024.

While some California fast food workers thought that 2023 would be a step forward for wage referendums, the FAST Act seems to have lost its swift implementation process. As reported by the Sacramento Bee, Sacramento Superior Court judge Shelleyanne W.L. Chang ruled that the proposed fast food council would be contrary to the referendum process, which allows California voters to have a say in the law's enactment. In addition, a temporary implementation of the law could "introduce confusion and uncertainty for both workers and employees." Meaning that if a law was enacted only to be repealed, the harm could outweigh the benefit to all parties involved. These two factors led to the FAST Act's implementation pause. Although the judge did not rule on the merits of the case, it appears that the law is moving toward becoming a California ballot item in November 2024.

Minimum wage concerns are not a new issue for the quick-service restaurant industry. In 2021, McDonald's CEO spoke to CNBC about the evolution of the acceptable minimum wage narrative. Whether that $15 per hour is attainable or no longer sufficient can be debated. Still, the increased employment expenses can be passed onto consumers via higher food costs. For now, California's FAST Act has hit a bump in the road, but the conversation on viable wages and working conditions will continue to move forward.