All you need to know about fast act law

Expressed opinions Entrepreneur Contributors own.

What is AB 257?

Assembly Bill (AB) 257 means the Fast Food and Accountability and Standards Recovery Act, or simply the “Fast Act”. The bill is being passed in the California State Assembly and, if passed, would further affect the state’s fast-food workers (and unions) in their workplace standards and wage rates. The bill would consider franchisees and franchisors as joint employers, sharing equal liability for labor standard violations.

Related: Inadequacy of labor? Depending on who you ask.

Committee based governance

If AB 257 becomes law in California, it will call for the formation of an 11-member committee with the power to draft and implement new state labor standards for the QSR industry. The panel will consist of two union / workers advocacy representatives, two fast-food workers, one representing the interests of franchisors and franchisees, and five additional members representing various state-level organizations.

Related: California votes to snatch employee protection from Uber and elevator drivers

The position of both sides is fixed

AB 257 has undoubtedly been praised by supporters of its goal, the Service Employees International Union (SEIU), whose president has described its passage as a “gamechanger to reduce income inequality” in dealing with fast-food workers in California.

On the other hand, the International Franchise Association (IFA) has the opposite view. It says the bill is “one of the most damaging parts of the law to affect the franchise business model.” The most expanding trade group in the franchising industry believes that the definition of joint employer of AB 257 increases the responsibility of franchisors to conduct their business according to their proven model.

What happens next?

While this problem is ongoing in California, the passage of AB 257 could have far-reaching implications for how franchise owners conduct business in other states if a new paradigm is established. The bill was up for a vote last July, but lost by just three votes. Now, this is another attempt to pass, cleared by the California State Assembly in January of this year. The California Senate will be the next battleground, as the bill is due for consideration this spring.

Related: Resolving labor shortages for small businesses

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