California Fast Food Workers $20 Minimum Wage

California fast food workers could soon earn a $20 minimum wage under a recently amended bill.

UPDATE (Sept. 29, 2023): The governor has signed the legislation into law. Original post continues below.

In exchange for the removal of a 2024 ballot measure, groups instead have agreed to move forward with legislation to raise the minimum wage for fast food employees in California to $20.

If passed, the new wage would go into effect April 1, 2024.

As a reminder, the current California minimum wage is $15.50, with it slated to increase to $16 in 2024. (Employers should also note that several cities in the state have enacted their own minimum wage rates.)

Minimum Wage Management. Simplified.

California Fast Food Workers Minimum Wage

Before getting to the negotiations over the $20 California fast food workers minimum wage, there are updates to the proposal to note.

Under the legislation amended this week, a covered employer would be a national fast food chain, defined as:

A set of limited-service restaurants consisting of more than 60 establishments nationally that share a common brand, or that are characterized by standardized options for décor, marketing, packaging, products, and services, and which are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming, with limited or no table service.

However, there are bread-making implications. Really. The law would not cover establishments that make and sell their own bread.

Meanwhile, after the initial increase to $20 in April 2024, future increases would be under the purview of a fast food council.

Related: Fight for $20 – The New Minimum Wage Push

California Fast Food Council Implications

By way of background, California in the fall of 2022 passed a law regarding the creation of a fast food council, which was to set minimum standards for workers in the industry, including:

• Wages
• Working hours
• Conditions related to health and safety
• Workplace security
• The right to take time off from work for protected reasons
• Protection from discrimination and harassment

But the measure was stalled and instead pushed to a 2024 ballot referendum. The recent concessions between California lawmakers and industry groups paved the way for the ballot measure to be removed. In exchange, there is a pared-down version of the council included in the latest legislation for a $20 California fast food minimum wage.

Still, beginning with Jan. 1, 2025, the council would have the option to set a new rate. Yet there are limits. The group could set an increase up to 3.5 percent or the change in the applicable Consumer Price Index, whichever is lower.

Lastly, regarding the reduction in power for the fast food council, the latest bill includes language that the body would not have the ability to:

• Create new paid time off benefits, such as paid sick leave or paid vacation
• Establish predictive scheduling regulations

Check out the language in the updated bill for additional details.

Related: California Healthcare Workers Minimum Wage Bill

Managing Minimum Wage Rates

The minimum wage situation in California, as always, is going to keep employers on their toes.

In addition to the $20 fast food workers minimum wage bill, there are a number of smaller jurisdictions with their own rates. Plus, managing minimum wage can be doubly challenging in places like LA County and its unincorporated minimum wage.

Elsewhere, with the federal minimum wage unchanged since 2009, the growth of county and city minimum wage laws continues to grow across the U.S. As of August 2023, there are 130 jurisdictions with a rate higher than the federal minimum wage:

• 31 states (including Washington D.C.)
• 45 counties
• 54 cities

With industry-specific rates, tipped wages and varying rates by company size (not to mention the challenges of minimum wage in Oregon), the complexities of managing minimum wage rates continues to grow.

Guide: County and City Minimum Wage Rates

Conclusion

Employers with locations in California should keep an eye out of the potential passage of a $20 California fast food workers minimum wage law.

As a reminder, if the bill is eventually signed into law, the new rate would initially take effect April 1, 2024, with any future updates happening on Jan. 1 each year.

Lastly, it is worth noting that the bill does not call for any new rates after 2029, and the fast food council would be dissolved, unless a new or updated law is passed.

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.