Recently, a new law was passed in the state of California, AB 1228, stating that all fast food employees starting April 1, must be paid a minimum wage of at least $20.00 per hour. This is one of the reasons the prices of fast food chains have increased so much.
A Fast Food Council has also been established to meet regularly to develop and discuss minimum employment standards. These standards could include future minimum wage increases, working hours, as well as the improvement of working conditions to maintain the safety and welfare of the employees. The role of the council is to ensure that all fast food employees are paid enough to properly sustain their own cost of living which is considered a “necessary change” to accommodate this current economy.
Under this new law, “fast food restaurants” have been given a new definition as well. Meaning, not every single conventional fast food restaurant will be receiving the same benefits. According to California’s Department of Industrial Relations, a fast food restaurant must have “limited-service” by offering limited to no tables, and all food purchased is paid for before immediate consumption. The fast food restaurant must be a part of a chain with at least 60 or more establishments nationwide, and administrative warehouses, or other food production facilities are not included in this minimum. For some fast food restaurants that offer prepared dishes intended to be baked at home, they will only be covered by this new law if more than 50% of their gross income is earned from immediate consumption foods, not the ones meant to be cooked later.
This law includes almost all fast foods including boba, ice cream, donuts and more, except for standalone bread. As of September 15, 2023, bread was declared a single unit item and sold as a stand-alone. All restaurants that sell stand-alone items below the weight of ½ pounds after cooling are not covered by this new law even if the money from bread makes up only a small portion of the income. Other establishments that are not included in this new law are fast food restaurants located in grocery establishments over the size of 15,000 square feet. Those establishments cannot earn more than 50% of their income from household supplies instead of food sales. Other facilities that are exempted from this pay raise are restaurants in airports, hotels, event centers with 1,000+ seats, theme parks, museums or a gambling establishments, on public land, or in buildings where the restaurant serves the company itself.
Aside from the exemptions, an employer does not have the right to include tips as a part of the $20.00 minimum. If an employee is not receiving this new addition to their paycheck, they have the right to make a legal claim through the Labor Commissioner. Methods to accomplish this can include arbitration or through a lawsuit.
