The California Department of Industrial Relations recently released its FAQs regarding the new fast food minimum wage law, AB 1228, which took effect on April 1, 2024. The legislation sets an industry-wide minimum wage for employees in fast food establishments at $20.00 per hour and applies to employees at fast food restaurants that are part of a chain with 60 or more nationwide locations, offer limited or no table service, and are engaged in selling food and beverages for immediate consumption. Significantly, franchises, regardless of their ownership structure, must comply if they meet these criteria.
There are exemptions that are not subject to the new law: restaurants primarily selling bread as a stand-alone item or those restaurants located within grocery stores, airports, hotels, event centers of a certain size, theme parks, museums, or gambling establishments. A restaurant with a concession agreement or food service contract located in a building for one for-profit company and which primarily serves the employees of that company or restaurants on public lands such as public beaches and parks also are not covered by AB 1228.
The FAQs also expressly answer questions regarding the minimum required salary for employees who work in fast food restaurants and who are considered exempt under the State’s administrative, professional, or executive exemptions. These exempt employees must be paid an annual salary of at least $83,200 unless the exempt employee manages both fast-food restaurant workers and non-fast food restaurant workers and may qualify for compensation based on a weekly blended rate.
For additional clarity on these guidelines, we encourage you to review the detailed FAQs and contact one of our experienced attorneys.