On September 28, 2023, Governor Gavin Newsom signed AB 1228, which will result in fast food employee minimum wages rising to $20 per hour on April 1, 2024. This is in stark contrast to the general minimum wage in California which will be $16 per hour starting on January 1, 2024.

A similar piece of legislation, the Fast Food Accountability and Standards Recovery Act, AB 257, was adopted last year, and fast food companies forestalled implementation of the legislation by amassing enough signatures to put the issue on a state-wide ballot in November 2024. This new legislation is dependent upon the businesses withdrawing the ballot measure. It is a negotiated compromise between businesses and unions to avoid a costly statewide ballot fight.

For employees, AB 1228 supersizes the following benefits:

• The definition of “national fast-food chain” is now based on 60 limited-service restaurants as opposed to 100 establishments under the previous law;
• Minimum wage increasing to $20 per hour on April 1, 2024;
• The possibility of annual wages increases beginning January 1, 2025, of either 3.5% or an amount based on average changes to the consumer price index for urban wage earners and clerical workers each year, whichever is lower;
• A Fast Food Council that can recommend minimum standard for hours and other working conditions; and
• The Service Employees International Union avoids an expensive ballot measure and can repurpose monies for other fights.

For employers, the benefits are not...

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