Exploring the Implications and Implementation of California's New Fast-Food Worker Law

In a significant move for California's fast-food sector, Governor Gavin Newsom recently enacted AB 1228 into law, instigating a series of changes. These include the establishment of the Fast Food Council, a boost in the minimum wage to $20 per hour, and alterations to employment standards within the industry.

This legislation applies to employees in national fast-food chains, specifically defined as "limited-service restaurants with more than 60 establishments nationwide, sharing a common brand and characterized by standardized decor, marketing, packaging, products, and services. These establishments primarily offer food and beverages for immediate consumption, with limited or no table service." Notably, bakeries and restaurants within grocery stores are exempt from this definition.

Formation of the Fast Food Council

AB 1228 sets up the Fast Food Council under the Department of Industrial Relations. Comprising nine voting members representing various stakeholders and non-voting members from relevant state agencies, its mandate includes recommending industry-specific employment regulations such as minimum wage rates and workplace standards to state agencies.

Raising the Bar: Minimum Wage Increase

Under AB 1228, the minimum wage for fast-food employees becomes the "state minimum wage." Effective April 1, 2024, this wage rises to $20 per hour, with provisions for annual adjustments based on factors like inflation. Importantly, this minimum wage supersedes any local requirements, impacting employers statewide.

Employer Considerations

The substantial increase to $20 per hour presents challenges for California fast-food employers, particularly amidst prior statewide minimum wage increases. Adjustments to budgets and staffing levels may be necessary, especially in areas with varying labor market rates or shortages. In addition, other businesses may see a need to increase their wages due to the competitive nature of fast food employee wages.

Protecting Employee Rights: Retaliation Clause

Included in the law is a retaliation clause safeguarding employees involved in Fast Food Council proceedings. Enforced by the labor commissioner, this clause secures protection and recourse for employees facing retaliatory actions.

Adapting to Change: Compliance and Preparation

AB 1228 heralds significant changes for California's fast-food industry, necessitating adaptation to new regulations, adherence to workplace standards, and avoidance of retaliatory measures against participating employees. Compliance and preparation are key to navigating these shifts effectively.