California Sets $20 Minimum Wage for Fast Food Workers
Author: Michael Cardman, HR & Compliance Center Senior Legal Editor
September 29, 2023
Fast food workers in California will be getting a raise next year.
Signed into law yesterday by Gov. Gavin Newsom, AB 1228 establishes a minimum wage of $20 per hour for fast food employees starting April 1 of next year.
The new law represents a more employer-friendly version of the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act), which was passed in 2022 but then blocked earlier this year before it could go into effect. A judge suspended the FAST Recovery Act and said it should be decided on by voters at the November 2024 election.
Then earlier this month, labor unions and the fast food industry reached a compromise under which the industry agreed to back AB 1228 in exchange for the repeal of the FAST Recovery Act and the elimination of provisions that would have imposed joint employment liability on franchised quick-service restaurants.
The following table highlights the differences between the two laws:
| Fast Food Accountability and Standards Recovery Act (FAST Recovery Act) of 2022 | Assembly Bill No. 1228 | |
| Minimum Wage |
2023 (date not specified): As high as $22.00 per hour January 1, 2024, and every January 1 thereafter through January 1, 2030: May be increased by 3.5% or by the rate of inflation, whichever is less, rounded to the nearest 10 cents |
April 1, 2024: - $20.00 January 1, 2025, and every January 1 thereafter through January 1, 2030: May be increased by 3.5% or by the rate of inflation, whichever is less, rounded to the nearest 10 cents Council may elect to set minimum wage standards that vary by region or to set a statewide minimum wage increase |
| Employer Coverage |
Fast food chains with more than 100 establishments nationally |
Fast food chains with more than 60 establishments nationally |
| Fast Food Council Authority | To promulgate minimum fast food restaurant employment standards on wages, working conditions and training | To develop minimum fast food restaurant employment standards on wages, working conditions and training |
| Fast Food Council Composition | 10 voting members, with five representing workers' interests and five representing employers' interests | Nine voting members, with four representing workers' interests, four representing employers' interests and one neutral chairperson |
| Local Preemption | Does not preempt higher local minimum wages | Prohibits cities and counties from enacting or enforcing higher wages or salaries for fast food employees |
“This agreement creates the best possible outcome for workers, local restaurant owners and brands, while protecting the franchise business model in California,” said Matt Haller, president and CEO of the International Franchise Association. “Franchising is responsible for creating opportunities for thousands of people to become small business owners, and this agreement eliminates the existential threats our members faced.”