Beginning April 1, 2024, California implemented a new minimum wage of $20 per hour for certain workers in the fast food sector.
This measure, spearheaded by AB 1228, is a watershed moment in the state’s labor legislation, aiming to improve the economic conditions of thousands of workers in one of the most active and vital industries. But who exactly qualifies for this increase? Here’s everything you need to know about 2025.
Who is the $20 minimum wage for?
The $20 minimum wage applies to fast food workers who meet the following criteria:
The company must operate at least 60 establishments nationwide.
It must offer a standardised menu and common branding.
The service should primarily be takeaway or quick consumption food.
The establishment must be located in California.
This includes kitchen employees as well as cashiers, cleaning staff and other operational roles within the restaurant.
Who is excluded?
Not all fast food workers are eligible for this minimum wage. AB 610, passed later, introduced key exemptions that exclude certain establishments and employees.
Restaurants inside supermarkets or large retail stores.
Establishments operating within airports, hospitals or universities.
Traditional bakeries that sell baked goods directly to the consumer.
Family businesses where the owner is directly involved in the day-to-day operation and has majority control.
In addition, if the restaurant is part of a franchise with fewer than 60 locations nationwide, it is not required to pay the minimum wage of $20.
What about other sectors?
This increase has no effect on the state’s general minimum wage, which will remain at $16.50 per hour for the majority of workers in 2025.
However, California has implemented differentiated minimum wages for other industries, such as healthcare, where some employees can earn up to $24 per hour, depending on the facility and region.
What should employers know?
Companies operating in the fast food sector and meeting the criteria must:
Ensure you pay at least $20 per hour to all eligible employees.
Update your payroll systems and information posters.
Comply with the additional regulations imposed by the Fast Food Council, a body created to oversee working conditions in the sector.
Failure to comply with these regulations can result in financial penalties and labor lawsuits.
What are the benefits of this measure?
The increase in the minimum wage seeks to:
Reducing employee turnover in the fast food industry.
Improve workers’ quality of life.
Set a fairer standard in an industry historically associated with low wages.
Furthermore, the move is expected to have a knock-on effect on other service industries, pushing for similar wage improvements.
Get informed and check your eligibility
If you work in a fast food restaurant in California, you should confirm that your employer is required to pay you the new minimum wage of $20 per hour. Knowing your rights is the first step toward ensuring you receive fair compensation.
And, if you are an employer, make sure to follow current regulations to avoid penalties and maintain a fair and competitive workplace.
