An Overview of AB 1228 (Regulations for Fast Food Employers in California)

On September 28, 2023, California Governor Gavin Newsom signed Assembly Bill 1228 (AB 1228) into law. It is a controversial—and previously delayed—law that will have major implications for the fast food industry in our state. Here, our Coachella Valley and Riverside County employment lawyers highlight key things that fast food employers need to know about the new California law.

AB 1228 Regulates “National” Fast Food Chain Restaurants 

As a starting point, it is important to understand that AB 1228 does not apply to all fast food restaurants in California. Instead, the new law applies to “national” fast food chain restaurants. The statute defines a national fast food chain as a limited-service eatery with over 60 nationwide locations. A covered restaurant is unified by consistent branding and standardized decor, marketing, packaging, products and services. Notably, there are some exceptions within the law. For example, “bakeries” are not included as part of the covered restaurants under the statute.

 The Minimum Wage for Covered Employers Will Jump to $20 Per Hour in 2024 

A key element of AB 1228 is the California state mandated minimum wage at covered restaurants is set to rise significantly. On April 1, 2024, the minimum wage at these establishments will be $20 per hour. Each subsequent year on January 1, the Fast Food Council can boost the minimum wage by either 3.5 percent or the average U.S. Consumer Price Index change, whichever is lower.

AB 1228 Authorized the Government to Create a Fast Food Regulatory Body in California 

Another key component of AB 1228 is that the law has authorized the creation of a fast food industry regulatory body that will operate under the Department of Industrial Relations (DIR). The Fast Food Council is made up of representatives of both employers and employees. Beyond adjusting the minimum wage for covered fast food restaurants, the Council can also pass other workplace standards—although it does not have the authority to implement those standards directly.

The Law Repeals the FAST Act (No Joint Employer Relationship Imposed) 

Finally, AB 1228 repealed the FAST Act (Fast Food Accountability and Standards Recovery Act), that was scheduled to take effect in the state in 2024 but was subject to referendum, due to its controversial reach over restaurants. Although AB 1228 includes some elements of the FAST Act—such as a higher minimum wage and the creation of a fast food regulatory body—it does not include all of the elements of that law. Most notably, AB 1228 has repealed the proposed “joint employer” relationship that appeared to increase liability between franchisors and franchisees in the fast food industry and reduced the authority and scope of the Council’s reach.

Get Help From an Employment Lawyer in Riverside County

At the Law Office of Karen J. Sloat, APC, our California employment lawyer for employers provides solutions-oriented legal guidance and support. If you have any questions about fast food industry labor regulations, we are here as a resource. Contact us today for a confidential consultation. We represent employers in the Coachella Valley, Riverside County, and throughout California.

 Source: 

leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1228