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Rand L. Stephens & Richard Koss

No Fooling: New Minimum Wage for Fast Food Employees in California Effective April 1, 2024

Restaurant worker serving food with smile.

California has always been at the forefront of progressive labor laws, and the latest development is no exception. Effective April 1, 2024, the Golden State will implement a new minimum wage specifically for fast food employees. This move is expected to have a significant impact on the fast food industry, employees, and the broader labor market in California. See below for an explanation of the new law. If you are a Bay Area employer or employee with wage and hour or employment discrimination issues at your workplace, contact Richard Koss to share your concerns with a skilled and experienced San Francisco employment law attorney.

Understanding the New Minimum Wage

Effective April 1, the new minimum wage for fast food workers in California is set at $20 per hour. This rate is significantly higher than the state’s general minimum wage of $16 an hour for non-fast food employees, reflecting the unique challenges and demands of the fast food industry. The increase is a result of extensive advocacy by labor unions and workers’ rights groups, particularly Service Employees International Union (SEIU), aiming to improve the livelihoods of thousands of fast food employees across the state.

Who Is Affected?

This new wage rate applies to workers in fast food establishments that are part of a chain with 60 or more locations nationwide. A fast food restaurant is defined in the law as a limited-service restaurant with limited or no table service and where customers order and pay upfront for their items before receiving their food or beverage. Additionally, the primary purpose of the establishment must be to sell food and beverages for immediate consumption. Some exceptions exist for restaurants operated within grocery stores and bakeries that meet certain criteria under the law. Contact an employment lawyer if you are unsure whether your establishment is covered or exempted.

The law covers all non-exempt positions in a covered establishment, from cashiers and cooks to maintenance staff. Exemptions for managerial employees who meet the salary basis test and other criteria under existing law will continue to be exempt from the minimum wage. Employers in the fast food industry need to be particularly vigilant in adjusting their payroll systems to comply with this change.

Future Increases to Come Courtesy of the Fast Food Council

The law increasing the minimum wage for fast food workers, AB1228, is the result of an agreement between fast food companies and labor unions that cut a provision that would have made the companies liable for franchisee workplace violations. The companies also agreed to withdraw a referendum to challenge the law in November. A previous law, AB257, created a Fast Food Council that could have increased the minimum wage to $22 an hour, but that law was suspended via referendum petition. The new law takes that power out of the hands of the Fast Food Council in exchange for the restaurant chains agreeing to withdraw their petition to challenge the law.

Nevertheless, AB1228 does establish a Fast Food Council made up of industry representatives, franchisees or restaurant owners, employees, union representatives, and an unaffiliated member of the public to oversee future wage increases and also create standards regulating fast food workplaces. This council will have the power to increase the minimum wage up to 3.5% each year.

Importantly, the law provides protection from retaliation for employees serving on the council or participating in council activities.

Implications for Employees

For fast food workers, this wage increase represents a significant boost to their income. It acknowledges the demanding nature of their work and the rising cost of living in California. Employees should see a noticeable difference in their paychecks, which can help alleviate financial stress and improve their overall quality of life.

Implications for Employers

Employers in the fast food industry must be proactive in adapting to this change. This includes updating payroll systems, re-evaluating labor costs, and possibly adjusting pricing strategies to maintain profitability. Employers should also be prepared for potential changes in employee dynamics, as the wage increase may affect staff retention and recruitment.

Legal Considerations

Both employees and employers need to be aware of their rights and obligations under this new law. Employees should ensure that they are receiving the correct wage and understand the legal avenues available if they encounter non-compliance. Employers, on the other hand, must adhere strictly to the new wage requirements to avoid legal repercussions, including fines and penalties.

Contact Bay Area Employment Lawyer Richard Koss for Help With Wage and Hour and Workplace Discrimination in San Francisco

The introduction of a new minimum wage for fast food employees in California is a landmark development in the state’s labor laws, creating the highest minimum wage almost anywhere in the country. It reflects a growing recognition of the value of workers in this sector and sets a precedent for other states to follow. As always, San Francisco employment law attorney Richard Koss is here to assist both employees and employers in navigating the legal landscape of this change. For help with employment practices and legal matters, contact Richard Koss at 650-722-7046 on the San Francisco Peninsula, or 925-757-1700 in the East Bay.

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