Non-exempt employees at covered fast food restaurants in California must be paid at least $20.00 per hour. The California fast food minimum wage took effect on April 1, 2024, and remains in place through 2026 unless the state’s Fast Food Council raises it.1Department of Industrial Relations. Fast Food Council The rate does not apply to every quick-service job in the state. It reaches a specific slice of the industry defined by Assembly Bill 1228, and the carve-outs matter as much as the headline number.
Which Restaurants Are Covered
A restaurant has to meet all three of the following tests to owe the $20.00 rate:2California Legislative Information. AB-1228 Fast Food Restaurant Industry: Fast Food Council: Health, Safety, Employment, and Minimum Wage
- It operates in a limited-service format, meaning customers order and pay at a counter, kiosk, or drive-through before eating. Full table service with waitstaff taking orders at the table does not qualify.
- It is part of a national chain with at least 60 locations. The count looks at the brand’s entire national footprint, not the number of stores a single franchisee owns. A franchisee running two locations is still covered if the brand has 60 or more nationwide.
- More than half of its gross revenue comes from food and beverages intended for immediate consumption, not packaged goods meant to be eaten later.
Miss any one of those conditions and the restaurant falls back to California’s general statewide minimum wage instead of the fast food rate.
Exemptions That Pull Some Restaurants Out
Three categories of fast food establishments are carved out even when they meet the three-part test.
Bakeries That Produce Bread On-Site
An establishment that was operating as a bakery on or before September 15, 2023, and produces and sells bread as a standalone menu item on its own premises, is exempt.2California Legislative Information. AB-1228 Fast Food Restaurant Industry: Fast Food Council: Health, Safety, Employment, and Minimum Wage On-site production is the pivot. A chain that resells bread baked elsewhere does not qualify.
Restaurants Inside Airports, Hotels, and Similar Venues
Fast food restaurants located inside airports, hotels, event centers, theme parks, museums, and hospitals can be exempt, but only if the venue operator itself runs the restaurant. If an independent franchise operates a branded location inside one of those venues, the exemption does not apply and the $20.00 rate controls.
Fast Food Counters Inside Grocery Stores
A fast food counter inside a grocery store may be exempt if the store is larger than 15,000 square feet, earns most of its revenue from groceries sold for off-site consumption, and employs the counter workers directly rather than through a separate franchise.2California Legislative Information. AB-1228 Fast Food Restaurant Industry: Fast Food Council: Health, Safety, Employment, and Minimum Wage If a franchise brand runs the counter with its own employees, the exemption falls away.
Salaried Managers at Covered Restaurants
The $20.00 rate also raises the salary floor for exempt managers. California requires an exempt employee to earn at least twice the applicable minimum wage for a 40-hour workweek, which puts the annual salary minimum for exempt managers at covered fast food establishments at $83,200.1Department of Industrial Relations. Fast Food Council A salaried manager paid less than that is legally non-exempt and entitled to overtime, meal and rest breaks, and the rest of the wage-and-hour protections that come with non-exempt status. The threshold sits well above California’s general exempt salary minimum, which has caught some franchise operators off guard.
How the Rate Can Change
AB 1228 created a nine-member Fast Food Council inside the Department of Industrial Relations, with representatives from the restaurant industry, franchisees, workers, and worker advocates.1Department of Industrial Relations. Fast Food Council The Council has the authority to raise the fast food minimum wage above $20.00. Annual increases became permitted on January 1, 2025, and the Council’s wage-setting authority runs through January 1, 2029.2California Legislative Information. AB-1228 Fast Food Restaurant Industry: Fast Food Council: Health, Safety, Employment, and Minimum Wage Any annual increase is capped at the lesser of 3.5% or the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which works out to a ceiling of about $0.70 in a single year.
The Council’s rate preempts local law. California cities and counties cannot set a separate minimum wage that applies only to fast food workers.
If You Are Paid Less Than the Fast Food Rate
If you work at a covered fast food establishment and earn less than $20.00 per hour, or less than whatever adjusted rate the Fast Food Council has set, you can file a wage claim with the California Division of Labor Standards Enforcement, usually called the Labor Commissioner’s office. Intake forms are available on the DLSE website and at local offices. Keep your own pay stubs and time records, because California wage claims can take months to work through. Retaliation for filing a wage complaint is illegal, and employers who cut hours or terminate a worker in response face additional penalties.