Fast Food Places in California are undergoing significant changes due to Assembly Bill 1228 (AB 1228). This law establishes a $20.00 per hour minimum wage for fast food workers starting April 1, 2024, and creates a Fast Food Council to oversee further wage increases and implement improved working conditions.
AB 1228 specifically targets fast food places that are part of a chain with at least 60 locations nationwide and primarily sell food for immediate consumption. This means that the majority of their revenue (over 50%) comes from ready-to-eat food and drinks. The law aims to ensure fair wages and working conditions for employees in this sector. However, there are exemptions to this rule, including restaurants located within grocery stores over 15,000 square feet, bakeries that produce and sell bread as a stand-alone item, and restaurants within specific venues like airports, hotels, and large event centers.
Franchise owners of fast food places are also subject to AB 1228, regardless of whether they own the national brand or operate under a franchise agreement. The law clarifies that “immediate consumption” typically refers to food eaten on-site, in a car, or immediately upon arriving home or at work. It excludes food intended for later cooking or baking at home.
There are nuances to the law regarding specific food types and business models. For instance, a shop selling items like ice cream, coffee, or donuts could be considered a fast food place under this law if it meets the criteria outlined in AB 1228. Similarly, ghost kitchens and virtual restaurants may also be covered if they are part of a national chain with 60 or more establishments.
Even within a single fast food chain, some locations might be exempt while others are not, depending on factors like whether they produce and sell bread as a standalone item. This can lead to variations in wages between employees working for the same company but in different locations.
AB 1228 also impacts salaried managers at fast food places. To be exempt from overtime pay, managers must earn a salary of at least two times the state minimum wage for a 40-hour workweek and meet specific job duty requirements. As of April 1, 2024, this threshold is $83,200 per year for fast food restaurant employees. For managers overseeing both fast food and non-fast food operations within a larger store, a blended salary calculation is required to determine their exemption status. This calculation considers the proportion of time spent managing each type of employee.
Tips cannot be used to offset an employer’s obligation to pay the minimum wage. Employees who believe they are entitled to the higher minimum wage but are not receiving it have several legal recourse options, including filing a wage claim with the Labor Commissioner or pursuing a lawsuit. The law also addresses wage garnishment for fast food employees, ensuring that a portion of their minimum wage is protected from collection. The newly formed Fast Food Council will play a key role in shaping the future of the fast food industry in California.
The Fast Food Council, comprised of representatives from various stakeholders including industry, employees, and advocates, is tasked with developing and implementing industry-specific employment standards. These standards could encompass future minimum wage adjustments, working hours regulations, and other conditions to ensure the well-being of fast food workers. The Council’s decisions are subject to public input and transparency, with open meetings and opportunities for public comment. The Council can adjust the minimum wage annually based on the consumer price index or a fixed rate of 3.5%, whichever is lower. They also have the authority to set different minimum wages for different regions of California.
