Fast Food Minimum Wage Law Exceptions Added

On March 25, 2024, Governor Gavin Newsom signed Assembly Bill 610 (AB 610) — an urgency measure effective upon signing — that creates additional exceptions to California’s fast food minimum wage law just before the new law takes effect.

As previously reported, California is increasing the minimum wage for fast food restaurant employees to $20 per hour starting April 1, 2024.

The law applies to fast food restaurants that are part of a fast-food chain consisting of more than 60 establishments nationally that:

• Share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products and services; and
• Primarily provide 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.

AB 610 creates exceptions for a wide array of restaurants that operate in conjunction with larger enterprises. Under the most recent revisions, the fast-food minimum wage law doesn’t apply to a restaurant that is:

• Located in an airport (excluding any military base or federally operated facility).
• Connected to or operated in conjunction with:
  • Hotels;
  • Events centers;
  • Theme parks;
  • Public or private museums; and
  • Gambling establishments.
• Located on a corporate campus, primarily serving employees and subject to a concession or food service contract.
• Located on certain public lands owned by the state, city or county.

According to AB 610, the California Legislature found that these restaurants generally do not share the same characteristics as traditional fast-food restaurants because they:

• Are operated in conjunction with larger enterprises with distinct economics and customer base;
• Are often operated subject to concession or food service contracts; and
• Have different employment structures.

Covered employers should review the new exceptions and consult with their legal counsel if they think an exception may apply.

James W. Ward, Employment Law Subject Matter Expert/Legal Writer and Editor

CalChamber members can read more about Wage and Hour Requirements for Fast Food Restaurants in the HR Library. Not a member? Learn more about how HRCalifornia can help you.