Fast Food California Minimum Wage has become a hot topic, significantly impacting both employees and consumers. At FOODS.EDU.VN, we are committed to providing clear, reliable insights into how these changes affect you. Let’s explore the details and see how you can navigate this evolving landscape with confidence, while discovering valuable resources for your culinary journey.
1. What is AB 1228 and How Does it Impact Fast Food Employees?
AB 1228, a new law in California, amends the Labor Code by adding sections 1474, 1475, and 1476. It primarily serves two functions: increasing the minimum wage for “fast food restaurant employees” and establishing a Fast Food Council empowered to further increase the minimum wage and adopt minimum employment standards for fast food restaurants.
1.1 Understanding the Key Provisions of AB 1228
AB 1228 aims to improve the working conditions and financial stability of fast food employees in California. According to the California Department of Industrial Relations, this law addresses long-standing concerns about low wages and inadequate employment standards in the fast food industry. The establishment of the Fast Food Council ensures ongoing evaluation and potential adjustments to these standards.
2. When Did the Minimum Wage Increase Take Effect?
The minimum wage increase under AB 1228 took effect on April 1, 2024. As of this date, all “fast food restaurant employees” covered by the new law must be paid at least $20.00 per hour.
2.1 The Immediate Impact on Fast Food Workers
This wage increase provides immediate financial relief to many fast food workers in California. According to a study by the University of California, Berkeley, the wage increase could lead to reduced employee turnover and improved morale in the fast food industry.
3. Are Employers Required to Post a New Minimum Wage Notice?
Yes, employers covered by the new law are required to post a supplement to the minimum wage order. This supplement, along with updated versions of Wage Order 5 and Wage Order 7, must be displayed in a conspicuous location accessible to employees. You can find the Supplement to the minimum wage order here.
3.1 Ensuring Compliance and Transparency
Posting the updated wage order ensures transparency and informs employees of their rights under the new law. The California Labor Commissioner’s Office emphasizes the importance of compliance to protect workers from wage theft and exploitation.
4. Can Employers Increase Meal or Lodging Credits to Offset the Minimum Wage?
No, AB 1228 does not authorize additional credits to the minimum wage. Fast food employers may only credit the amounts allowed by the statewide minimum wage.
4.1 Protecting Workers’ Full Earnings
This provision prevents employers from reducing workers’ earnings by increasing meal or lodging credits. The aim is to ensure that employees receive the full benefit of the minimum wage increase.
5. Can Cities or Counties Enact Higher Minimum Wages Specifically for Fast Food Employees?
No, cities or counties cannot pass ordinances setting higher minimum wages solely for fast food restaurant employees covered by AB 1228.
5.1 Local Minimum Wage Laws Still Apply
However, cities or counties can set a higher general minimum wage for all employees, which would then apply to fast food employees as well. Fast food restaurants must pay the higher local minimum wage if it exists.
6. Who Qualifies as a “Fast Food Restaurant Employee” Under the New Law?
To be considered a fast food restaurant, the establishment must meet all of the following criteria:
- It must be a “limited-service restaurant” in California, offering limited or no table service. Customers order and pay for food or beverages before consumption.
- It must be part of a restaurant chain with at least 60 establishments nationwide. An establishment is a single restaurant location.
- It must be primarily engaged in selling food and beverages for immediate consumption.
6.1 Defining “Limited-Service Restaurant”
A limited-service restaurant is characterized by its minimal table service. Customers typically order and pay at a counter or kiosk before consuming their food.
6.2 The “60 Establishments Nationwide” Requirement
This requirement ensures that the law applies to larger fast food chains with a significant national presence. Off-site business locations used for administrative or preparatory tasks are not counted towards this minimum.
6.3 “Primarily Engaged in Selling Food and Beverages for Immediate Consumption”
This means that the restaurant earns more than 50% of its gross revenue from selling food and beverages meant to be consumed immediately.
7. Does AB 1228 Apply to Franchise Owners?
Yes, AB 1228 applies to employers of “fast food restaurant employees” regardless of whether the employer is the business entity that owns the national brand, or a franchisee or licensee of that national brand.
7.1 Ensuring Consistent Application Across Franchise Models
This provision ensures that the minimum wage increase applies consistently across all fast food establishments, regardless of their ownership structure.
8. What Does “For Immediate Consumption” Mean?
“For immediate consumption” refers to food and beverages that customers typically eat at the restaurant, in their car, or soon after taking it home or to work. Food sold to be baked, cooked, or heated at home is not considered for immediate consumption.
8.1 Distinguishing Between Ready-to-Eat and Prepared-at-Home Foods
This distinction clarifies which types of food sales are covered under the new law. Foods requiring further preparation are excluded from the definition of “immediate consumption.”
9. How Does the Law Apply to Restaurants Selling Both Immediate and Non-Immediate Consumption Items?
If a restaurant chain sells both food and drinks for immediate consumption and other items not meant for immediate consumption, it will be covered by the fast food minimum wage if it earns more than 50% of its gross revenue from selling food or beverage items for immediate consumption.
9.1 Revenue-Based Determination
The primary source of revenue determines whether the restaurant is covered by the new law. If immediate consumption items generate the majority of revenue, the law applies.
10. Could Shops Selling Ice Cream, Coffee, Boba Tea, Pretzels, Cookies, or Donuts Be Considered Fast Food Restaurants?
Yes, the definition of “fast food restaurant” does not depend on what type of food or beverage an establishment sells. As long as the establishment meets the criteria outlined in Question 6, it could be considered a fast food restaurant covered by the new law.
10.1 Broad Definition of “Fast Food Restaurant”
This broad definition ensures that various types of establishments are included under the law, as long as they meet the core criteria of limited service, chain affiliation, and immediate consumption sales.
11. Does the Fast Food Minimum Wage Apply to Employees at Virtual Restaurants or Ghost Kitchens?
Possibly. Generally, ghost kitchens and virtual concept restaurants appear to be “limited service restaurants” because they are primarily engaged in providing food services to patrons who order or select items and pay before eating, without any table service, with food and drink orders delivered to the customer’s location. Therefore, if the ghost kitchen or virtual concept restaurant is part of a nationwide chain consisting of at least 60 establishments characterized by standardized marketing, products or services, or if it prepares food that is sold under the brand label of such a nationwide chain, the ghost restaurant or virtual concept restaurant would be covered by the fast food minimum wage.
11.1 Adapting to New Restaurant Models
The law’s applicability to virtual restaurants and ghost kitchens reflects the evolving nature of the food service industry. These establishments must also comply with the minimum wage requirements if they meet the specified criteria.
12. Are There Any Exemptions for Certain Fast Food Restaurants?
Yes. The following restaurant establishments are not covered by the new law:
- Restaurants that operate a bakery that “produces” and sells “bread” as a stand-alone menu item as of September 15, 2023, and continue to do so are exempt from the new law.
- Restaurants located within a “grocery establishment” are exempt from the new law.
- Restaurants connected to or operating in conjunction with specific locations such as airports, hotels, event centers, theme parks, museums, or gambling establishments are also not covered by the law.
- Also not covered by the law are restaurants subject to a concession agreement or food service contract if the restaurant is in a building or campus primarily used by one for-profit company and primarily serves the employees of that company, or on public land if the public land is a public beach, park, historic district, or operated by a port authority.
12.1 The Bakery Exemption
To qualify for the bakery exemption, the restaurant must produce and sell bread as a stand-alone item weighing at least ½ pound after cooling. This exemption applies only to restaurants that meet these criteria as of September 15, 2023, and continue to do so.
12.2 The Grocery Establishment Exemption
A fast food restaurant establishment is exempt from the new law if it meets both of the following:
(1) The restaurant establishment is located and operates within a “grocery establishment.” The term “grocery establishment” is defined as a retail store in the state that is:
- over 15,000 square feet in size; and
- sells primarily household foodstuffs for offsite consumption, including the sale of fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, or prepared foods”;
- with any sale of other “household supplies or other products … secondary to the primary purpose of food sales.”
Primarily means that the establishment earns more than 50% of its gross income from the sale of household foodstuffs for offsite consumption.
(2) The grocery establishment employer employs the individuals working in the restaurant.
12.3 Exemptions Based on Location and Contractual Agreements
Restaurants operating in conjunction with airports, hotels, event centers, theme parks, museums, or gambling establishments are exempt. Additionally, restaurants subject to concession agreements or food service contracts in certain settings are also excluded.
13. What if an Employee Works Both in a Fast Food Restaurant and Another Store?
If an employee works for a fast food restaurant inside another store that is not a grocery store, and their employer assigns them tasks in both locations, they are likely covered by the new minimum wage law for fast food restaurants for the hours they work in the fast food restaurant.
13.1 Allocation of Wages Based on Work Location
In such cases, the employee should receive the fast food minimum wage for the time spent working in the fast food restaurant.
14. Can Employees at Different Locations of the Same Chain Have Different Wage Rates?
Yes. Even though an employer may have to pay $20.00 an hour to workers at some of its establishments, workers at the employer’s other establishments may be exempt from the law. For example, if the establishment where you work produces and sells “bread” as a stand-alone menu item, your work establishment would be exempt under the bakery exemption. The establishment where your friend works may be selling the same items and be a part of the same restaurant chain, but may not “produce” bread on site. Under this scenario, your friend’s establishment would be covered by the new law, and the employees at your establishment would be exempt under the bakery exemption. You are still entitled to the generally applicable minimum wage.
14.1 Location-Specific Exemptions
The applicability of the law can vary based on the specific operations of each establishment, even within the same chain.
15. How Does the Law Impact Salaried Managers Who Do Not Receive Overtime?
Under California law, to qualify as an “exempt employee” for wage and hour purposes, a manager must receive a salary of at least two times the state minimum wage for someone working 40 hours a week and meet other specific requirements. If a fast food restaurant employee’s salary is less than $83,200 as of April 1, 2024, they are not an exempt employee.
15.1 Ensuring Fair Compensation for Managers
This provision ensures that managers are fairly compensated and not misclassified as exempt employees to avoid paying overtime.
16. How Should Employers Calculate Salaries for Managers Overseeing Both Fast Food and Other Store Employees?
For a manager to qualify as an “exempt employee” under California law, the employer must pay them at least two times the state minimum wage for someone working 40 hours a week, and the manager must meet other specific requirements, including the requirement that the manager must be engaged in exempt tasks for more than 50% of their worktime. If your employee is managing both fast-food restaurant workers and non-fast food restaurant workers, then two different statewide minimum wages would apply to determine the salary threshold for exemption-the fast food restaurant minimum wage for time overseeing the fast food restaurant work and the general statewide minimum wage for the time overseeing workers not assigned to, fast food restaurant work. An employer would have to calculate the blended rate on a weekly basis, based on the percentage of time spent on those tasks.
For example, a manager who, in the course of a workweek in April 2024, spends forty percent (40%) of their time overseeing the store’s fast food restaurant workers and sixty percent (60%) of their time managing the store’s other workers would have to be paid $1,408 to meet the minimum salary requirement for exempt status that week. The math capturing this blending of rates follows:
For time spent managing fast-food operations: $20/hour x 2 x 40 hour fulltime workweek = $1,600 weekly salary x 40% = $640
For time spent managing store’s other operations: $16/hour x 2 x 40 hour fulltime workweek = $1280 weekly salary x 60% = $768
Blended rate: $640 plus $768 = $1,408 salary for that week.
16.1 Blended Rate Calculation for Managers
Employers must calculate a blended rate based on the percentage of time spent managing fast food operations versus other store operations to determine the minimum salary requirement for exempt status.
17. Can Employers Use Tips as a Credit Toward the Minimum Wage?
No. An employer may not use an employee’s tips as a credit toward its obligation to pay the minimum wage per hour.
17.1 Tips Are in Addition to Minimum Wage
This ensures that employees receive their full minimum wage in addition to any tips they earn.
18. What Should an Employee Do If They Believe They Are Not Being Paid the Correct Minimum Wage?
An employee who has not been paid the minimum wage can bring a legal claim to recover wages due and possibly related damages and penalties. The employer carries the burden of proving they are not covered by the new law.
18.1 Options for Pursuing a Wage Claim
Employees can file an individual wage claim with the Labor Commissioner’s Wage Claim Adjudication Unit, file a Report of Labor Law Violation with the Labor Commissioner’s Bureau of Field Enforcement, or pursue a claim through arbitration or a lawsuit.
19. Is the Fast Food Restaurant Minimum Wage Used for Garnishment Calculations?
Yes. When calculating the wages exempt from garnishment for a fast food restaurant employee, the party seeking to garnish the wages must use the applicable statewide fast food restaurant minimum hourly wage unless a higher, local minimum hourly wage exists.
19.1 Protecting Minimum Wage from Garnishment
This ensures that a portion of the employee’s minimum wage is protected from garnishment, providing a safety net for essential living expenses.
20. What is the Fast Food Council?
AB 1228 created the Fast Food Council. The Fast Food Council is composed of appointed representatives from the fast food restaurant industry, fast food restaurant franchisees or restaurant owners, fast food restaurant employees, advocates for fast food restaurant employees, and one unaffiliated member of the public. The Council also has two non-voting members, one from the Department of Industrial Relations and one from the Governor’s Office of Business and Economic Development.
20.1 Composition of the Fast Food Council
The Fast Food Council includes representatives from various stakeholders, ensuring a balanced perspective in developing new employment standards.
21. What Will the Fast Food Council Do?
The Council will meet regularly to develop new minimum employment standards specific to the fast food industry. These standards could include future minimum wage increases (although these could not occur prior to January 1, 2025) as well as working hours and working conditions to “ensure and maintain the health, safety, and welfare of, and to supply the necessary cost of proper living to fast food restaurant workers.”
21.1 Authority and Responsibilities of the Council
The Council has the authority to establish future minimum wage increases and set standards for working hours and conditions in the fast food industry.
22. How Often Can the Minimum Wage Increase?
The hourly minimum wage established by the Council can increase every year by either 3.5% or the increase in the consumer price index, whichever is smaller. The Fast Food Council can establish a single statewide minimum wage for fast food restaurant employees or vary the minimum wage by region of the State.
22.1 Limitations on Wage Increases
Wage increases are capped at either 3.5% or the increase in the consumer price index, whichever is smaller, to ensure sustainable growth.
23. Are the Council’s Meetings Open to the Public?
Yes. The Council’s meetings will be open to the public, and the Council will take public comment on all action items.
23.1 Transparency and Public Participation
Public access to the Council’s meetings ensures transparency and allows for public input on important decisions.
24. Understanding the Broader Impact of the Fast Food Minimum Wage
The increase in the fast food minimum wage has several potential implications:
- Increased Prices: Restaurants may raise prices to offset the higher labor costs.
- Automation: Some restaurants may invest in automation to reduce their reliance on labor.
- Economic Impact: The increased wages could boost the local economy as workers have more disposable income.
- Job Creation: Some argue that higher wages could attract more workers to the industry, leading to job creation.
24.1 Potential Economic Effects
Economists have varying perspectives on the long-term effects of the minimum wage increase. Some predict increased prices and reduced employment, while others anticipate a boost in consumer spending and improved worker productivity. According to a report by the Economic Policy Institute, the impact on prices is likely to be modest, while the benefits for low-wage workers could be substantial.
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We provide resources and support to help you understand your rights and options under the new law. Our website offers:
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35. Frequently Asked Questions (FAQs) About Fast Food California Minimum Wage
Here are some frequently asked questions about the fast food California minimum wage:
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What is the current minimum wage for fast food workers in California?
As of April 1, 2024, the minimum wage for fast food workers in California is $20.00 per hour.
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Who is considered a “fast food worker” under this law?
A “fast food worker” is an employee of a limited-service restaurant that is part of a chain of at least 60 establishments nationwide and primarily sells food and beverages for immediate consumption.
-
Are there any exemptions to the fast food minimum wage law?
Yes, there are exemptions for restaurants that operate a bakery producing and selling bread as a stand-alone item, restaurants located within a grocery establishment, and restaurants connected to certain locations like airports or hotels.
-
Does this law apply to franchise owners?
Yes, the law applies to employers of “fast food restaurant employees” regardless of whether the employer is the business entity that owns the national brand, or a franchisee or licensee of that national brand.
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Can cities or counties set a higher minimum wage for fast food workers?
No, cities or counties cannot pass ordinances setting higher minimum wages solely for fast food restaurant employees covered by AB 1228, but they can set a higher general minimum wage for all employees.
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What is the Fast Food Council?
The Fast Food Council is composed of appointed representatives from the fast food restaurant industry, fast food restaurant franchisees or restaurant owners, fast food restaurant employees, advocates for fast food restaurant employees, and one unaffiliated member of the public.
-
What does the Fast Food Council do?
The Council will meet regularly to develop new minimum employment standards specific to the fast food industry.
-
How often can the minimum wage increase under this law?
The hourly minimum wage established by the Council can increase every year by either 3.5% or the increase in the consumer price index, whichever is smaller.
-
What should an employee do if they are not being paid the correct minimum wage?
An employee who has not been paid the minimum wage can bring a legal claim to recover wages due and possibly related damages and penalties.
-
Where can I find more information about the fast food minimum wage law?
You can find more information on the California Department of Industrial Relations website or by contacting the Labor Commissioner’s Office.
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37. Discover Related Articles and Resources
To further enhance your understanding and culinary skills, we recommend exploring these related articles on FOODS.EDU.VN:
- Understanding California Labor Laws: A comprehensive guide to labor laws in California.
- The Impact of Minimum Wage on Restaurant Prices: An analysis of how minimum wage increases affect restaurant prices.
- Essential Cooking Techniques for Beginners: A step-by-step guide to mastering basic cooking techniques.
- Global Cuisine: A Culinary Journey: Explore the diverse flavors and traditions of global cuisine.
- Healthy Eating on a Budget: Tips and recipes for maintaining a healthy diet on a budget.
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