An amended version of AB 1228 was passed in the California Legislature on September 14, 2023, [1] which would raise minimum wages for fast food workers and water down the authority of the new Fast Food Council that was created in a bill passed last year. AB 1228, originally introduced on February 16, 2023, was revised on September 11, 2023 after negotiations occurred between labor unions and the fast food industry. It significantly modifies provisions from the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act) passed last year, which does not go into effect unless voters approve it via Referendum 1939 in the November 2024 election. AB 1228 will now go to California Governor Gavin Newsom, who has until October 14, 2023 to sign or veto this bill.

If signed by Governor Newsom, AB 1228 would:

• Set the minimum wage for fast food restaurant employees at $20 per hour effective April 1, 2024

• Provide that the Fast Food Council may establish annual minimum wage increases up to 3.5 percent or the rate of change in the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers, whichever is lower, until January 1, 2029, and that the Council may elect to set minimum wages that vary by region or are set statewide

• Preempt local municipalities from establishing higher minimum wages for fast food restaurant employees specifically (but local municipalities can establish a higher minimum wage generally applicable to all industries)

• Reshape the Fast Food Council, including:

  • Remove from the Council the sole authority to promulgate minimum fast food restaurant standards, instead requiring that the standards, rules and regulations developed by the Council must go through the Administrative Procedure Act

  • Require its first meeting to be convened by no later than March 15, 2024

• Repeal provisions of the FAST Recovery Act but only if Referendum No. 1939 is withdrawn by January 1, 2024

• Sunset the Fast Food Council on January 1, 2029

• Eliminate the provision on joint liability for fast food franchisors for their franchisees for civil liability for violations of employment laws

AB 1228 defines the scope of affected restaurants as:

• “National fast food chain”

  • Consist of more than 60 establishments nationally that share a common brand or or that are characterized by standardized options for decor, marketing, packaging, products, and services

  • Which 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

• “Fast food restaurant”

  • A limited-service restaurant in the state that is part of a national fast food chain

  • There is an exemption for establishments operating as a bakery that produce bread for sale on its premises

This bill marks a significant change and raises the minimum wage considerably for fast food workers across the state of California.

[1] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1228