California’s AB 1228 sets a $20 hourly minimum wage for qualifying fast food workers starting April 1, 2024. A new council will meet to discuss pay adjustments and workplace rules across covered fast food restaurant locations.
By Brad Nakase, Attorney
Email | Call (888) 600-8654
Have a quick question? I answered nearly 1500 FAQs.
California’s new law, AB 1228, introduced Labor Code provisions 1474, 1475, & 1476. It accomplishes two major goals. The minimum salary for “quick food establishment employees” is raised, to start. Second, it creates a Fast Food Committee, which has the authority to choose further minimum employment requirements for fast food establishments as well as to raise the minimum pay in the future.
Every “fast food establishment employee” who falls under the new regulation will have to start receiving a minimum of $20 per hour from April 1, 2024.
Indeed. Employers bound by the fast food industry’s minimum wage are required to post a supplement for the minimum wage mandate. As a consequence of AB 1228, Wage Orders 5 and 7 were also revised in Mar 2024.
No, further minimum wage credits were not approved by AB 1228. Only the amounts permitted by the state minimum wage may be credited by a fast-food establishment.
No, a county or city cannot enact an ordinance raising the minimum wage solely for workers at fast-food establishments that are subject to this statute.
The standard minimum wage for every worker, including those covered by this statute, may be raised by a city or county, though. For instance, a minimum wage regulation enacted by the local government can mandate that all workers in the city receive compensation above the present minimum wage for fast food workers. The increased regional minimum wage must subsequently be paid by the fast food outlet.
Additionally, a local government may establish a greater minimum wage tailored to a specific workforce, provided that fast-food workers are excluded.
Only staff of “fast-food establishments” are subject to the law. A restaurant must fulfill each of the following requirements in order to be classified as a fast-food establishment:
The law does not apply to all fast-food establishments, though. (Refer to Question 12).
Employers who hire “fast food restaurant personnel” are subject to AB 1228, irrespective of whether they are the company that controls the national brand or a licensee or franchisee.
Fast food patrons usually eat at a seating location either within or outside the establishment, in their vehicle, or immediately as they reach home or finish their order. Food sold for home cooking, baking, or heating is not meant to be consumed right away.
The fast food minimum wage in California will apply to you if the network of restaurants’ primary business is selling food or beverages that are meant to be consumed right away, which accounts for over fifty percent of its total income.
For instance, if a fast food restaurant chain makes 70% of the revenue from selling fully cooked meals and drinks for immediate consumption while earning 30% from “take & bake” pizza that’s baked in the home, the chain is primarily involved in selling foods and drinks for quick consumption and would be subject to the new law (assuming no other exemptions apply).
As an additional illustration, if a network of chocolate vendors makes 40% of its income from offering chocolates that customers can eat right away but 60% from selling chocolate boxes, the chain is actually not involved in selling food and beverages that customers can consume right away and would not be protected by the law.
Indeed, an establishment’s choice of food or drink has no bearing on what constitutes a “quick food restaurant” (refer to Question 6).
Likely. In other words, virtual restaurants and ghost kitchens can be considered “limited service restaurants” because their initial business is that of selling food to consumers who order or pick their meals and pay before eating. Food and beverage orders: They do not have table service and get their orders delivered to their own spot.
Thus, if the virtual restaurant and ghost kitchen prepares food that is distributed under the name and label of a nationwide chain with at least 60 locations and established products, marketing, and services, or if it is an affiliate of such a network, it would be subject to the fast food minimum wage California.
A. Yes. According to the new law, the following eateries are exempt:
The new rule does not apply to restaurants that have a bakery that “makes” and offers “bread” as an independent menu item until 15th Sep 2023, and that are still doing so.
An item is classified as ‘bread’ if, post-cooling, the item weighs no less than ½ pound and is required to be marketed as a stand-alone product.
The following categories of fast-food establishments are not covered by the exemption:
The only restaurants covered by this exception are those that, starting on 15th Sep 2023, produced and distributed bread as an independent menu item and have done so ever since.
The restaurant need not be primarily selling bread as an independent item in order to qualify for this exemption. Bread sales as an independent menu item may still qualify for the exclusion even if they only make up a small percentage of the restaurant’s overall food sales.
B. The new law does not apply to restaurants that are housed in “grocery establishments.”
The following conditions must be met for a fast food restaurant to be exempt under the new law.
C. The rule also does not apply to eateries associated with or working with the following establishments.
D. And if the establishment is, in addition, included in a food service contract or concession agreement, any restaurant covered by the statute is also exempt.
Very likely. If none of the other exemptions apply, you would be subject to the fast food minimum wage California statute for the period that you spend at the fast food restaurant since your employer isn’t eligible for the “grocery establishment” exception.
Yes. Although employees at some of the employer’s establishments may be required to pay $20.00 per hour, employees at the company’s other establishments may not be subject to this requirement. In the event that your workplace produces and markets “bread” as a separate menu item, for instance, your workplace would be excluded from the bakery exception. Even while your friend’s workplace may sell the same products and belong to the same chain, it might not “make” bread on-site. This would mean that the new legislation would apply to your friend’s business, but the bakery exemption would exempt your employees. The minimal pay that applies generally is still yours.
According to California law, you must be paid at least twice the minimum wage set by the state for a worker putting in 40 hours per week in addition to fulfilling other standards in order to be considered an “exempt employee” under wage & hour justifications. As of 1st Apr 2024, you aren’t an exempt worker if your pay as a fast food establishment employee is lower than $83,200.
A manager must be paid at least twice the minimum wage set by the state for a 40-hour workweek in order to be considered an “exempt employee” according to California law. In addition, the manager must fulfill other requirements, such as spending over fifty percent of their working hours performing exempt duties.
No, a company is not allowed to deduct tips from an employee’s wages in order to meet its fast food minimum wage California requirements.
A lawsuit may be filed by a worker who was not paid the required wage in order to recoup unpaid pay as well as any associated penalties or damages. The onus will be on your company to demonstrate that they are exempt from the new law.
Three methods are generally available for presenting such a claim: a suit in court, an alternate dispute resolution process like arbitration (if permitted or mandated by a job agreement), or the Labor Commissioner.
Workers who choose the Labor Commissioner option have two options: they can submit an Appeal of Labor Law Infraction to the Bureau of Field Enforcement under the Labor Commissioner, which cites the employer and refrains from investigating individual claims, or they can submit an individual wage dispute to the Wage Claim Adjudication Unit. Any local Labor Commissioner office or the Labor Commissioner’s website includes additional information regarding wage claims & rights of employees in general.
Yes. Unless a greater, regional minimum hourly pay exists, the party attempting to garnish wages must utilize the appropriate statewide minimum hourly rate for fast food restaurants when determining the wages exempted from garnishment for an employee who works there.
The Fast Food Council was established under AB 1228. The Fast Food Council is made up of one independent member of the general population, franchisees and restaurant owners, workers, advocates representing fast food restaurant workers, and appointed members from the business. Additionally, the Council has 2 non-voting participants: one from the Business & Economic Development (Governor’s Office) and another from the Dept. of Industrial Relations.
The Council will hold frequent meetings to create new minimum employment requirements tailored to the fast food sector. These requirements might include raising the minimum salary in the future (though not before 1st Jan 2025), as well as regulating working conditions and hours in order to “ensure and safeguard the health, welfare, and safety of, and to offer the required expenses for adequate living to fast food restaurant employees.”
Have a quick question? We answered nearly 2000 FAQs.
See all blogs: Business | Corporate | Employment Law
Most recent blogs:
Contact our attorney.