California Raises Wages for Fast-Food Workers

​A new California law means fast-food workers will be paid more and a new state entity will oversee working conditions in the industry.

On Sept. 28, Gov. Gavin Newsom signed AB 1228, which sets a $20 minimum wage for fast-food workers starting on April 1, 2024. The fast-food employee minimum wage will increase annually until 2029, based on the Consumer Price Index. The law applies to chains of limited-service restaurants consisting of more than 60 establishments that share common branding, marketing and products.

As a result, “menu prices are going to have to increase, so it’s going to hit the consumer almost immediately,” said Alden Parker, an attorney with Fisher Phillips in Sacramento, Calif. Additionally, “the penalty for [an employee’s] missed meal period goes up too, because that’s tied to the minimum wage.”

Some family-run restaurants could experience a labor shortage if bussers, prep cooks and hosts seek higher wages at fast-food chains, Parker noted.

The bill was recently amended to eliminate a provision that would have imposed joint-employer status on franchisers. That step “preserves the franchise business model in the state and solidifies the best possible outcome for workers, local restaurant owners and brands,” said Matt Haller, president of the International Franchise Association in Washington, D.C. “Commonsense has prevailed.”

Fast Food Council

The new law establishes the Fast Food Council, which can set an hourly minimum wage for fast-food restaurant…