Starting Monday, April 1, junk food dining establishments in California will be needed to pay their employees a minimum of $20 an hour when Assembly Bill 1228 lastly works.
The polarizing law, which has been praised by supporters for low-income workers and blasted by the restaurant market, is expected to cause menu price boosts at many popular chains, consisting of McDonald's and Chipotle.
The quick-service dining establishment industry uses at least 500,000 Californians, but how many of them receive the raise?
The California Department of Industrial Relations has actually published a Frequently Asked Questions website about AB 1228 with the hope of cleaning up any confusion.
Among the more pressing questions are: what is considered a "fast food restaurant," and which workers are covered by the brand-new law?
According to the state's site, it should be a "limited-service restaurant ... that provides limited or no table service, where consumers order food or beverage items and pay for them before they are consumed."
The food needs to be meant for "instant usage."
Los Angeles, CA – – September 28: Gov. Gavin Newsom sees SEIU Local 721 in
Los Angeles to sign legislation raising California fast food employees' base pay to $20 an hour on Thursday, September 28, 2023. (Photo by Sarah Reingewirtz/MediaNews Group/
Los Angeles Daily News via Getty Images).
Even if a dining establishment fulfills those requirements, there is yet another layer.
A smaller, locally owned and run hamburger joint or taco store per se will not be affected by the new law if it is not part of a chain of a minimum of 60 restaurants nationwide.
" Business locations carrying out just administrative, warehouse, or cooking work are not counted as "establishments" toward the 60-establishment minimum," the state describes.
What if a dining establishment serves food for "instant intake" however also provides prepared meals to be warmed and served later on?
This is where things get a bit dirty.
If a dining establishment makes more than 50% of its gross earnings from selling food or drink items for "instant intake," then its workers should be paid $20 an hour beginning Monday.
" For example, if a junk food pizza dining establishment earns 30% of its profits from 'bake and take' pizza to be baked at home, however makes 70% of its profits from sales of fully-cooked food and beverages for immediate consumption, the dining establishment is primarily engaged in selling food and beverage for immediate intake and would be covered by the new law (provided no other exemption uses)," according to the FAQs.
McDonald's franchisee 'can't raise rates enough' to cover minimum wage walking.
What about ice cream, boba pretzel, donut and tea stores?
Yes, they are thought about fast food, and if they become part of a chain with at least 60 areas, they must adhere to AB 1228.
Exemptions.
Among the more controversial aspects of the new law is the exemption for restaurants that likewise run as bakeries and offer and produce "bread" as a stand-alone menu item.
Why is "bread" in quote marks? Since that likewise needed to be defined.
The FAQ site discusses, "Bread is specified as a single unit product that weighs a minimum of 1/2 pound after cooling and need to be offered as a stand-alone item.".
Hamburger buns, croissants, scones, muffins and rolls do not count due to the fact that they aren't heavy enough.
Restaurants aren't exempt if they do not produce bread on-site, which likewise required to be specified because some restaurants bake pre-made dough (those aren't exempt).
It appeared that Panera Bread would be exempt, which led to an uncomplimentary article from Bloomberg which reported that it was a carve-out for a rich Gov. Gavin Newsom donor, Greg Flynn, who owns two dozen Panera Bread locations in California.
Both Newsom and Flynn denied the assertion, and Flynn later on announced that he would follow the new law.
What if a grocery store serves fast food at a different counter or kiosk?
AB 1228 may not use.
There's an exemption for fast food facilities located within a store "over 15,000 square feet in size" that sells mostly "home foods items," consisting of fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, drinks, baked foods, or prepared foods to be taken in offsite.
The new law consists of numerous other provisions, including whether fast food managers are exempt, whether employees who get ideas are exempt (they're not), and why there could be differences in between two staff members who work for the exact same chain.
Read all FAQs about California's brand-new junk food minimum wage law here.
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