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Client Alert: The Governor Signs an Eleventh Hour Amendment to the Fast Food Minimum Wage Law That Creates New Exceptions For Certain National Fast Food Chain Restaurants

by Dennis C. Huie and Ruby Zapien

Just days before the new minimum wage law for fast food chains was supposed to take effect, Governor Gavin Newsom signed Assembly Bill 610 (“AB 610”) which amends Labor Code § 1474 et seq. (aka the FAST Act) to create new exceptions to the minimum wage law for national fast food chains.  This amendment will take effect immediately as an urgent statute.

Under current law, starting April 1, 2024, California restaurants that are part of a National Fast-Food Chain must start paying their fast-food employees a minimum wage of $20.00 per hour.  Section 1474 defines a “National Fast-Food Chain” as restaurants that have the following attributes:

  1. Consists of more than 60 establishments nationally;
  2. That share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services; and
  3. Are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming, with limited or no table service.

AB 610 carves out exceptions for otherwise covered restaurants that are:

  1. Located in an airport excluding any military base or federally operated facility;
  2. Connected to or operated in conjunction with a hotel;
  3. Connected to or operated in conjunction with an event center;
  4. Connected to or operated in conjunction with a theme park;
  5. Connected to or operated in conjunction with a public or private museum;
  6. Connected to or operated in conjunction with a gambling establishment; or
  7. Operated pursuant to a concession agreement or food service contract and is located either: a) In an office building, group of buildings or campus for a single, for-profit corporation and its affiliates where the restaurant primarily or exclusively serves employees of that corporation/affiliates; or b) On land owned by the state, city, county or other political subdivision of the state, that is part of a port district or land managed by a port authority or port commission, a public beach or pier, a state, municipal or regional park, or historic district.

Should you have any questions about your restaurant’s obligations under the FAST Act or its newly carved-out exceptions, please contact the RJO attorney you work with or the authors of this article. 

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