Debate Heats Up on Fast Food Wage Increases

It’s been a year, and California fast food workers may soon see another gift coming their way, as the debate heats up on fast food wage increases. As a reminder, for the first time ever, a separate fast food minimum wage of $20/hour was established for fast food workers at chains with over 60 locations nationally as of April 1, 2024, previously reported here.

The Service Employees International Union (SEIU) is arguing that the fast food minimum wage should be increased by 70 cents, making it $20.70/hour, to keep up with rising costs of living. This argument has apparently caught the attention of California’s Fast Food Council, who is now considering the 70-cent increase for review at its next meeting this Spring.

While the increase is sure to be welcomed by fast food workers, fast food operators report they are already struggling with higher labor costs, resulting in reduced hours, job cuts, and even store closures.

As we await an official vote from the Fast Food Council, fast food operators should prepare for potential mid-year wage increases by doing the following:

• Budget for the increases now. Fast food operators who reviewed their budget at year’s end may not have accounted for higher wages. It is a good idea to review how a potential increase may impact staffing, store hours, overtime policies, etc., and be prepared to update your budget accordingly.
• Consider exempt employees. The DIR has clarified that an exempt employee’s minimum salary for fast food workers is tied to the fast food minimum wage, not California’s State minimum wage. This means an increase to $20.70 will result in $86,112/annually ($20.70 x 2 x 2,080) for exempt fast food workers. Consider whether you should reclassify any employees from exempt to non-exempt now, particularly if your budget won’t sustain the increase.
• Prepare for administrative requirements. Upon any wage increases, employers should always update their Wage Theft Notices for non-exempt employees’ personnel files, ensure pay stubs are accurate, and post the most recent minimum wage notice in a conspicuous location.

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