Covered California fast food workers must be paid at least $20.00 per hour under Assembly Bill 1228, a rate that took effect on April 1, 2024, and remains in place through 2026.1Department of Industrial Relations. Fast Food Council The California fast food minimum wage does not apply to every restaurant job in the state, though. It reaches non-exempt workers at limited-service chains with 60 or more locations nationwide, and a handful of carveouts pull specific establishments back out.
Which Restaurants Are Covered
A restaurant is a “covered fast food establishment” only if it meets all three of these tests:2California Legislative Information. AB-1228 Fast Food Restaurant Industry: Fast Food Council: Health, Safety, Employment, and Minimum Wage
- Limited-service format. 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.
- Part of a national chain with at least 60 locations. The count looks at the brand’s entire national footprint, not how many stores a single franchisee owns. A franchisee running two locations is still covered if the brand has 60 or more.
- Primarily selling food for immediate consumption. More than half of gross revenue must come from food and drinks meant to be eaten right away, not packaged goods for later.
Miss any one of those, and the establishment pays California’s general statewide minimum wage instead.
Who Is Exempt From the $20 Rate
Several categories of restaurants sit outside the law even when they otherwise fit the three tests.
Bakeries
An establishment that operated 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 key. A chain that resells bread baked elsewhere does not qualify.
Restaurants Inside Venues
Fast food locations inside airports, hotels, event centers, theme parks, museums, and hospitals can be exempt, but only if the venue operator itself runs the restaurant. When an independent franchise operates a branded location inside one of these venues, the $20.00 rate applies.
Restaurants Inside Grocery Stores
A fast food counter inside a grocery store may be exempt if two conditions are met: the store exceeds 15,000 square feet and earns most of its revenue from groceries sold for off-site consumption, and the fast food employees are hired and paid directly by the grocery store rather than by 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 operates the counter with its own employees, the exemption falls away.
Salaried Managers at Covered Restaurants
The $20.00 hourly rate also lifts the salary floor for exempt managers. California requires an exempt employee to earn at least twice the minimum wage for a 40-hour workweek, which at $20.00 per hour works out to a minimum annual salary of $83,200 for managers at covered fast food establishments.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 other protections that come with non-exempt status. That threshold is meaningfully higher than California’s general exempt salary minimum, and it catches some franchise operators off guard.
How the Rate Can Change
AB 1228 created the Fast Food Council, a nine-member body inside California’s Department of Industrial Relations with representatives from the restaurant industry, franchisees, workers, and worker advocates.1Department of Industrial Relations. Fast Food Council The Council can raise the fast food minimum wage above $20.00 and set standards for hours and working conditions in the sector.
Annual increases became permissible on January 1, 2025, and the Council keeps that authority through January 1, 2029, when it sunsets.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). In practice, the rate can climb by about $0.70 in a single year at most.
The Council’s authority preempts local rules. No California city or county can set a separate minimum wage that applies only to fast food workers. Whatever the Council sets is the rate statewide.
What To Do if You Are Underpaid
If you work at a covered fast food establishment and earn less than $20.00 per hour (or whatever adjusted figure the Council has set), you can file a wage claim with the California Division of Labor Standards Enforcement, known as the Labor Commissioner’s office. The process starts with an intake form available on the DLSE website or at a local office. Wage claims often take months to resolve, so hold on to your pay stubs and time records. Retaliation for filing a complaint is illegal, and employers who cut hours or terminate workers in response face additional penalties.
One California-specific point worth knowing: the state does not allow a tip credit against the minimum wage. Every covered fast food worker must receive the full $20.00 per hour before tips, regardless of what federal tipped-minimum rules say.