AB 257 Hurts Small Businesses Owned by People of Color, Women, and Immigrants
Restaurants offer more opportunities for People of Color, Women, immigrants, and other minority communities to be independent small business owners.
Employees and communities benefit from local owners who understand their unique needs – this measure would take away that independence with a one size fits all approach.
AB 257 would take away small business opportunities for underserved communities and deliver them back to corporate America in an unprecedented corporatization of the franchise model.
Instead of creating opportunity, AB 257 would seriously restrict new entrepreneurs, especially People of Color, women, and new immigrant business owners, who want to be in business for themselves, but not by themselves and benefit from a brand that is already known to the public.
Unlike large corporate entities, the majority of franchisee profits remain in the local community, allowing franchisees to reinvest in jobs, job training and community development and involvement. AB 257 will reduce those opportunities.
This measure would prevent new and start up brand from opportunities to grow with local owners and partners in communities where there is opportunity, slowing innovation and growth with new brands and concepts.
Local business ownership is better for employees, who can better compete for higher wages and benefits.
AB 257 Hurts Small Businesses Owned by People of Color, Women, and Immigrants
AB 257 singles out a sector of restaurants with the burden of additional regulations, creating dramatic inequities for these small business owners.
Independent industry researchers estimate that California was one of the top 10 states and territories where small businesses were impacted the most by the pandemic.
Considering the overwhelming number of franchises owned by People of Color, these underserved communities will be especially burdened as franchise contracts come up for renewal and are likely converted to corporate locations.
As our state is beginning to emerge from a pandemic, businesses are re-opening and struggling to rehire hundreds of thousands of employees, now is not the time to implement another onerous regulatory structure that will dramatically diminish the recovery and slow rehiring and rebuilding.
In past recoveries, franchising has expanded faster than overall GDP. The franchise model’s unique structure allows for faster hiring, rapid business openings, and more stable performance than other businesses.
With existing regulations at the state and local levels, this measure adds more requirements and costs in order to unnecessarily duplicate existing state and local regulators.
More regulations mean costs to operate go up, leaving fewer resources for workers.
In addition to existing state and local agencies, this statewide board also allows for more local boards, more costs, more regulation, and more confusion.
More Political Appointees without Accountability or Oversight
This commission puts politics over good policy.
AB 257 creates a new council that can establish rules without considering whether they are the best policy and can only be changed if they are found to be illegal.
This council can change rules and regulations established by the Legislature and other well-established worker protection agencies.
AB 257 goes around our elected legislators by giving authority to the council to make workplace policy decisions that have traditionally been the responsibility of the legislative branch.
AB 257 Undermines California’s Existing Worker Protection Agencies
California already has the strictest employee protections in the country.
AB 257 puts political agendas ahead of independent regulators with decades of experience in protecting worker rights.
California already has vast resources for enforcement of labor laws – hundreds of millions of taxpayer dollars a year. This adds more politics and bureaucracy instead of enforcement of our already robust labor laws.
Cal/OSHA, LDWA, DIR and other agencies have thousands of employees and tens of millions of dollars to ensure workers’ rights are promoted and protected. This would undermine those agencies and their independent regulators.
State and local agencies (i.e. Department of Industrial Relations, local health departments) currently exist to protect and improve the health, safety, and economic well-being of employees and to ensure that employers comply with state and local laws.
In fact, restaurants have been less susceptible to COVID outbreaks with less than 4% of outbreaks in LA County in 2020 and state data shows they were less than 7% of outbreaks in 2021.
Of 1380 COVID non-compliance citations in LA County only 6 were issued to the kinds of restaurants being targeted by this new board. (Large chain, fast food restaurants defined in the legislation as having 30+ locations, offer take-out food options, with limited to no table service.)
Of 1331 county inspections in 2020, inspectors found restaurants had:
96% compliance on disinfection orders
91% compliance on mask requirements
81% compliance on physical distancing
California restaurants through COVID have shown to have FEWER outbreaks and cases than many other major sectors, including retail trade and manufacturing. Restaurants had less than half as many cases stemming from these outbreaks as retail trade, and less than a third as many cases as manufacturing but are being singled out for dramatic increases regulation.
Opens the Door to New Shakedown Lawsuits
Use the wrong soap, get sued.
Regulations from this new council can be enforced by trial lawyers – even if no employee has been harmed.
California already has overburdened courts and too many shakedown lawsuits where lawyers get millions and workers get nothing. This only makes our lawsuit problems worse.
Paid for by the California Restaurant Association and the International Franchise Association
