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What to Know About California's Fast-Food Wage Increase

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workers prepare plates of food in a restaurant kitchen
Who is eligible for California's new wage rise for fast-food workers? And what can you do if your boss isn’t giving you this increased wage? (Hal Bergman/Getty Images)

Starting Monday, April 1, fast food restaurants operating in California will be required to raise the minimum wage for their workers to $20 per hour — an increase of four dollars an hour from the previous minimum wage. Employers are not allowed to include tips in the wage increase.

California lawmakers approved AB 1228 last September, which ordered an increase in the wages of the state’s fast food workers and also established a Fast Food Council which is “empowered both to make future increases to the minimum wage and to adopt other minimum employment standards for fast food restaurants.”

“Living wages and worker safety should be a priority for corporate fast-food companies,” said Joseph Bryan, the Executive Vice President of the Service Employees International Union in a statement. “The vast majority of fast-food locations in California operate under the most profitable brands in the world.”

“Those corporations need to pay their fair share and provide their operators with the resources they need to pay their workers a living wage without cutting jobs or passing the cost to consumers,” said Bryan.

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But who exactly is eligible for this new wage rise? And what can you do if you’re a fast food worker and your boss isn’t providing you with this increased wage? Keep reading for what to know about California’s fast food minimum wage increase.

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Which fast food workers will receive California’s minimum wage increase?

This new law applies to all fast food establishments that have sixty or more locations throughout the nation with at least one of locations in California, according to Veronica Chavez, the directing attorney at legal services nonprofit Centro Legal de la Raza in Oakland.

But what counts as “fast food” here? The state says that to be subject to the new $20 minimum wage rise, the establishment must be a “limited-service” restaurant in California: That is, “one that offers limited or no table service, where the customers order food or beverage items and pay for those items before the items are consumed” and which is “primarily engaged in selling food and beverages for immediate consumption.”

Chavez said restaurants that should comply would also include places that people may not typically associate with fast food, including boba tea shops, cafes and ice cream parlors. The state is clear that this wage rise “does not depend on what type of food or beverage an establishment sells.”

Read more information about which establishments count as “fast food.”

Are there exemptions to the fast food minimum wage increase?

The state’s exemptions from the new law are already causing some confusion. They include:

Restaurants inside grocery stores

This means that if you’re employed by a grocery store — even if you’re assigned to the fast food restaurant within that store — you aren’t eligible for this minimum wage raise. But if you’re employed at a fast food restaurant that’s within another kind of store — not a grocery store — the state says you are in fact eligible for the fast food raise, but only for the hours you work inside the fast food restaurant itself.

Places that have a bakery onsite that produce bread to sell by itself 

If an establishment produces its own bread that is sold as a standalone item on its menu, then the state says that location is exempt from the new fast food minimum wage rise — as long as that menu item has been offered to customers since at least Sept. 15, 2023.

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But if your workplace makes its own bread that’s then sold at that location in the form of sandwiches or hamburgers — with no standalone bread items also on the menu — then the establishment is not exempt from paying its workers the $20 minimum wage.

According to the state, also exempted under “bread” are establishments that “sell stand-alone items weighing less than one-half pound after cooling, such as most muffins, croissants, scones, rolls, or buns, but do not sell bread weighing at least one-half pound after cooling.”

The bread exemption has caught the attention of many, with Governor Gavin Newsom’s critics claiming that he was sparing his donor Greg Flynn — the owner of Panera Bread — from the new law. However, Flynn stated earlier this month that his chain will comply with the new law.

Fast food establishments within places like airports 

The newest exemption to the fast food wage rise was signed into law by Gov. Gavin Newsom just last week, exempting fast food establishments in places like airports, hotels, large event centers, theme parks and museums.

The last-minute bill states that these places “generally do not share the same characteristics as traditional fast food restaurants that are part of national fast food chains” on account of their factors including their “distinct economics and a captive customer base.”

I’m a fast food worker who’s eligible for the minimum wage increase, but my boss isn’t raising my pay. What can I do?

AB 1228 specifically states that California’s Labor Commissioner will be enforcing the new minimum wage law, said Centro Legal de la Raza’s Chavez. This agency investigates wage theft and wage violations.

First, check your pay stubs, paying particular attention to the section that deals with your hourly wage to see if your employer is adhering to the new $20 minimum wage. If you get paid in cash, look over those earnings carefully too. Remember, your employer is not allowed to include tips — or meal or lodging credits employees might receive — in the new minimum wage rise, if you’re eligible.

But what if your boss is trying to do that, is falsely claiming your workplace is exempt from the new law, or is straight-up refusing to pay you the raise you’re owed as an eligible fast food worker?

Chavez said that if your employer is not complying with the new law, you can:

Fast food employers must also publicly post a notice of the minimum wage increase inside the establishment (PDF).

Chavez said she recommended having communications with an employer in writing, “so that there is evidence of the employer failing to comply or whatever the response is … but hopefully just a conversation with them in person and then following up via text or email will suffice and help get the employer to make the necessary change.”

Some workers may feel extra nervous about having these complicated conversations, especially if they fear that their employer will retaliate against them by cutting their wages or hours or firing them. If an employee is worried about retaliation, Chavez said one could file a compliance complaint with the Labor Commissioner. You can also call (714) 558-4913 or email osharetaliation@dir.ca.gov. Legal protections against retaliation in California also extend to undocumented workers.

Bay Area organizations that offer free legal aid to workers include:

What is this ‘Fast Food Council’?

The new minimum wage law for fast food workers also created a Fast Food Council, which will meet to discuss employment standards within the industry like working hours and conditions – and could potentially set a new minimum wage increase from 2025 and onwards.

According to the state, 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.”

The Council includes not just representatives from the industry and workers advocates but also fast food employees themselves. The Council will also have two non-voting members from the Department of Industrial Relations and the Governor’s Office of Business and Economic Development, and meetings will all be open to the public.

“[The Fast Food Council] is really unique to California and I think it’s great,” Chavez said. “We know that restaurant workers are unfortunately some of the lowest paid workers who often have safety issues — who encounter health violations and have to work through all that.”

What could the future look like for the fast food minimum wage?

“The minimum wage really is not something that results in livable wages,” said Chavez, who noted that “poverty wages” resulted in workers needing to take on multiple jobs and really struggle.” According to the Massachusetts Institute of Technology’s Living Wage Calculation for California, an adult with no children would need to make $27.32 per hour in the state to make a living wage. An adult with a child would need to make $47.96 per hour.

The Roosevelt Institute think tank also released an analysis stating that it was possible for establishments to pay their employees more without increasing consumer prices — something that some fast food business representatives in California have claimed they’ll now have to do in the light of the April 1 minimum wage hike.

“Between 2014 and 2023, fast-food prices increased by 46.8 percent compared to 28.7 percent for the average of all prices,” the Roosevelt Institute analysis states. “Evidence of fast-food firms’ recent profiteering makes it clear that the upcoming implementation of a fast-food minimum wage of $20 per hour in California will not necessitate price hikes or employment losses, because profits in the industry are sufficiently high to absorb the greater operating costs.”

Joseph Bryan, the Executive Vice President of the Service Employees International Union and now member of the new Food Council said employers made price hikes and job cut threats when California set the minimum wage to $15 per hour.

“The minimum wage in California has gone up every year since 2015,” said Bryan. “On the same timeline, fast food restaurants in California added 142,000 jobs.”

“The top nine publicly traded fast food companies alone took in nearly $25 billion in profits in 2023,” he said, adding that “multiple studies” had demonstrated that “higher wages lead to increased worker retention, recruitment and job growth.”

KQED’s Carly Severn and Carlos Cabrera-Lomelí contributed to this story.

 

 

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