California’s newly enacted $20-an-hour minimum wage increase for fast food workers that took effect Monday will affect chains with locations in airports, hotels, event centers, theme parks, museums and grocery stores. does not apply.
Last fall, California Governor Gavin Newsom signed Assembly Bill 610, which increases the minimum wage for workers employed by fast food chains from $16 to $20 an hour.
Companies such as McDonald’s and Chipotle have warned that increased labor costs will be passed on to consumers through higher menu prices.
Scott Rodrick, a franchisee who operates 18 McDonald’s restaurants in and around the San Francisco Bay Area, said he refuses to charge $20 for a Happy Meal but has had to raise menu prices.
According to the law, chains operating in what the law calls “grocery stores” (stores with more than 15,000 square feet of retail space that primarily sell household groceries for off-premises consumption) must exempted from the law. .
The law states that “grocery stores” must earn 50 percent of their gross income from the sale of household food products for consumption off-premises and must employ workers to work in fast-food restaurants.
Fast food chains that don’t meet these requirements must pay their employees a minimum wage of $20 an hour.
One of the most controversial carve-outs to minimum wage laws concerns the sale of bread.
The law exempts restaurants that sell bread as a “separate menu item” as long as the bread is made on-site and weighs at least half a pound after cooling.
However, restaurants that sell bread weighing more than half a pound but use pre-made dough or dough made outside the restaurant are not exempt.
Chains that sell muffins, croissants, scones, rolls and bread individually will have to meet new minimum wage requirements.
In February, Bloomberg News reported that Panera Bread Co. has passed minimum wage laws thanks to lobbying by Greg Flynn, a billionaire franchisee who has enjoyed long business and political ties to Newsom. reported that they would benefit from the exemption.
The story sparked a backlash that forced Mr. Newsom’s office to clarify that Panera Bread does not qualify for the exemption because it does not make its own dough.
Language regarding in-house fabric manufacturing was included in the bill before Bloomberg News reported on it.
Mr. Flynn released a statement stating that Panera Bread stores will comply with the new minimum wage requirements.
The law was written to reject the workaround of fast food chains to start producing their own bread.
As of September 15 last year, the exemption for bread was limited to restaurants that manufactured and sold bread as single items.
