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Labor Commissioner’s FAQ on Fast Food Minimum Wage
Tuesday, April 16, 2024

On April 1, 2024, the new fast-food minimum wage took effect. At the end of March, California’s Labor Commissioner issued an FAQ regarding the new minimum wage. It includes the following sections:

  • Overview of the Minimum Wage Increases
  • Who is covered by the law
  • The role of the fast-food council in addition to minimum wage

The FAQ highlights important aspects of the new fast-food minimum wage statute:

Posting Requirements

There is a supplemental posting to the minimum wage order that must be posted by covered employers. The supplemental posting is available on the Labor Commissioner’s page.

Covered Employees

The FAQs reiterate the definition of “fast-food restaurant employees” as follows:

 The law applies only to employees of “fast food restaurants.” To be considered a fast food restaurant, the restaurant must meet ALL of the below criteria:

  1. The restaurant must be a “limited-service restaurant” in California. A limited service restaurant is one that offers limited or no table service, where the customers order food or beverage items and pay for those items before the items are consumed.
  2. The restaurant is part of a restaurant chain of at least 60 establishments nationwide. An establishment is a single restaurant location offering food or beverages to customers. Off-site business locations (geographically separate from a restaurant location), at which employees perform administrative, warehouse, or preparatory food production tasks, are not counted as “establishments” toward the 60 establishment minimum.
  3. The restaurant is primarily engaged in selling food and beverages for immediate consumption.

Employees who work at different locations of the same fast food restaurant chain may not both be covered if one of the locations is exempt from the law, such as if just one location produces bread on-site.

Importantly, the FAQs confirm that the minimum wage set by the statute impacts the minimum salary threshold to be an exempt employee under California law. Under state law, the minimum salary threshold is currently $66,560 but it is now $83,200 for restaurant employees. However, if the exempt employee is working at a larger store with a fast-food component and other aspects, the FAQs provide that a blended rate may be appropriate between the fast food and non-fast food work calculated on a weekly basis based on the percentage of time spent on those tasks. An example is provided in the FAQs but employers should consult counsel if they decide to move forward with this blended rate approach.

Fast Food Council

Though the minimum wage has been the most highly publicized aspect of the law, the Council will also meet regularly to develop other minimum employment standards for the fast food industry in California.

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