California Assembly Bill 1228 (AB 1228) significantly impacts the minimum wage for fast food workers in California. This law establishes a $20.00 per hour minimum wage for eligible fast food employees starting April 1, 2024, and creates the Fast Food Council to potentially implement further wage increases and set industry-specific employment standards.
AB 1228 defines a “fast food restaurant” as a limited-service restaurant, part of a chain with at least 60 locations nationwide, primarily selling food for immediate consumption. This includes quick-service establishments where customers order and pay before eating, with minimal or no table service. Drive-thrus, counter service, and take-out models typically fall under this definition.
Certain exemptions apply. Restaurants within grocery stores exceeding 15,000 square feet and primarily selling groceries for off-site consumption are exempt. Restaurants in airports, hotels, large event centers, theme parks, museums, and gambling establishments are also excluded. Additionally, restaurants operating under concession agreements or food service contracts in specific locations, like those primarily serving employees within a for-profit company’s building, are exempt. Finally, stand-alone bakeries producing and selling bread loaves weighing at least half a pound are also not covered by the new law.
Franchise ownership does not exempt employers from AB 1228. Whether a franchisor or franchisee, businesses meeting the criteria must adhere to the $20.00 minimum wage. “Immediate consumption” generally refers to food eaten on-site, in a car, or immediately upon arriving home or at work, excluding items requiring further preparation.
The law requires employers to post a supplement to the existing minimum wage order, informing employees of the new fast food minimum wage. Employers cannot offset the minimum wage with meal or lodging credits beyond those allowed by existing statewide regulations. Tips also cannot be credited towards the minimum wage obligation.
Local governments cannot enact separate minimum wage ordinances specifically for fast food workers covered under AB 1228. However, they can establish higher general minimum wages applicable to all employees, including fast food workers.
The Fast Food Council, comprising representatives from the industry, franchisees, employees, employee advocates, and the public, will consider future minimum wage adjustments and other employment standards related to working hours and conditions within the fast food industry. The Council’s decisions will impact the future of fast food employment in California. Annual increases to the minimum wage can be up to 3.5% or the rate of inflation, whichever is lower.
Employees who believe they are covered by the law but are not receiving the mandated minimum wage should contact the California Labor Commissioner’s Office to file a wage claim or report a labor law violation. The Labor Commissioner’s website provides comprehensive information on employee rights and the process for filing claims. For salaried managers, exemption from overtime requires a salary at least twice the state minimum wage for a 40-hour workweek and fulfillment of other specific criteria. Managers overseeing both fast food and non-fast food operations require a blended salary calculation based on the proportion of time spent on each task. When calculating wage garnishments, the fast food minimum wage is used to determine the protected portion of earnings.
