Hey Compliance Warriors and Bosses!
California is once again leading the way in employment reform with a groundbreaking new law that significantly raises the minimum wage for many fast food employees to $20 per hour, starting April 1, 2024. This initiative marks a substantial shift in the wage structure for the fast food industry, particularly affecting employees of national fast food chains within the state. Here’s what you need to know about this pivotal legislation.
Who is Affected?
The law targets employees working for fast food restaurants that are part of a national chain, with more than 60 establishments across the country. To fall under this law, these restaurants must share a common brand or have standardized options for appearance, marketing, packaging, and offerings. Additionally, these establishments should be primarily engaged in offering food and beverages for immediate consumption, with customers paying upfront and minimal or no table service provided. Notably, certain bakeries and restaurants located within grocery stores are exempt from this law.
Required Notice for Employers
Employers with covered employees are now mandated to post a supplement to the minimum wage order prominently, ensuring that it’s visible in a place frequented by employees. This step ensures that all affected workers are informed about the new wage standards and their rights under this law.
Future Increases and Exemptions
The establishment of the Fast Food Council brings another layer to this legislation, granting it the authority to annually increase the minimum wage beginning January 1, 2025. However, with the law’s introduction, specific exemptions have been highlighted. These exemptions now include fast food restaurants located in airports, those operated in conjunction with hotels, event centers, theme parks, museums, or gambling establishments, as well as those within corporate offices or government-owned lands operating under a concession or food service contract.
Impact on Exempt Employees
In a significant update, the California Department of Industrial Relations clarified that the increase to a $20 per hour minimum wage also affects the salary threshold for exempt executive, administrative, and professional (EAP) employees in fast food restaurants. The minimum annual salary for these positions will rise to $83,200. This adjustment aligns with California’s requirement that exempt status employees earn at least twice the state minimum wage on a monthly basis. Employers must now decide whether to adjust salaries to meet the new threshold or reclassify affected employees as nonexempt, thus extending to them the rights and benefits associated with nonexempt status, such as overtime and breaks.
Looking Ahead
This legislation is a testament to California’s ongoing commitment to worker rights and economic fairness. While the law sets a new benchmark for fast-food employee wages, it also introduces complexities for employers navigating the updated requirements and exemptions. With potential additional exemptions under consideration in pending legislation, employers and employees alike must stay informed about the evolving legal landscape.
As this law comes into effect, it will likely serve as a model for other states considering similar measures, underscoring the importance of advocacy and legislative action in shaping the future of work. For now, California’s fast food workers can look forward to a significant wage increase, setting a new standard for the industry nationwide.
