California Employer Update: Additional Increases to California’s Fast Food Minimum Wage On Tap for Discussion, by Kartikey Pradhan, Esq. and Karina Vals, Esq., 3-28-2025

Just one year after certain covered California fast food restaurant employees received a staggering 25% minimum wage increase from $16 to $20 an hour, another increase could be on the horizon.

California’s Fast Food Council, which was created out of AB 1228, the legislation that also resulted in the minimum wage increase that took effect April 1, 2024, reportedly recently approved a motion to consider a cost-of-living adjustment.

According to Reuters, the Council’s next meeting, which has yet to be scheduled, is slated to take place in April or May, where the issue will be discussed further. The Council, made up of fast food workers, government appointees, and industry leaders, is authorized to increase the wage annually by either 3.5% or the increase in the consumer price index, whichever is smaller. A 3.5% bump would increase the minimum wage to $20.70.

Many restaurant owners have been vocal in their opposition against further wage increases. In a Jan. 29^th letter to California Governor Gavin Newsom, restaurant owners contended that such an increase would “cripple thousands of small business owners like us who are already struggling to survive the $20/hour minimum wage.”

Covered Employees

 The law applies only to employees of “fast food restaurants.” To be considered a fast food restaurant, the restaurant must meet ALL of the below criteria, according to the state’s FAQ:

1. • The restaurant must be a “limited-service restaurant” in California. A limited service restaurant is one that offers limited or no table service, where the customer’s order food or beverage items and pay for those items before the items are consumed.
   • The restaurant is part of a restaurant chain of at least 60 establishments nationwide. An establishment is a single restaurant location offering food or beverages to customers. Off-site business locations (geographically separate from a restaurant location), at which employees perform administrative, warehouse, or preparatory food production tasks, are not counted as “establishments” toward the 60-establishment minimum.
   • The restaurant is primarily engaged in selling food and beverages for immediate consumption.

Certain restaurants and employees are exempt from the law, as explained in the FAQ.

Whether the increase takes effect has yet to be seen, but as a preemptive measure restaurant owners may want to start planning ahead in the event an increase does occur including projecting the financial impact, etc. For more on AB 1228, check out KD’s previous blog on the law.

Kaufman Dolowich will continue to monitor developments. Updated Council meeting dates are posted on the Department of Industrial Relation’s site.

Authors: Kartikey Pradhan is a Partner and Karina Vals is an Associate at Kaufman Dolowich