California’s newest fast-food law, which went into effect Monday, raises the minimum wage for fast-food workers from $16 per hour to $20.
Most of the fast-food workers statewide are expected to benefit from the new law after Democrats in the state Legislature acknowledged that most who work in fast-food restaurants are not teenagers earning some spending money but adults working to support their families, the Associated Press reported.
Still, the new law won’t benefit everyone who works at a fast-food restaurant.
On March 25, Gov Gavin Newsom signed Assembly Bill 610 into law, which exempts fast food restaurants in “airports, hotels, event centers, theme parks, museums, and certain other locations, as prescribed” from the new law.
Restaurants in “grocery establishments” are also exempt from the new law.
California defines a “grocery establishment” as a retail store that’s over 15,000 square feet that sells “primarily household foodstuffs for offsite consumption… secondary to the primary purpose of food sales.”
The “grocery establishment” also must earn 50% of its gross income from selling household foodstuffs for offsite consumption and employ the individuals working in the restaurant, according to the state’s Department of Industrial Relations.
For example, if a Starbucks is located within a Ralph’s that is over 15,000 square feet and employs individuals working at the coffee stand, those employees won’t qualify for the new wage increase.
However, fast-food restaurants that don’t meet the exemptions will be required to pay their employees more.
Due to the new law, California-based franchise operators for restaurants like Pizza Hut, Auntie Anne’s and Cinnabon announced plans to reduce staff or raise prices to keep up with labor costs.