There has been a lot of talk lately about how the fast food minimum wage increase has made a negative impact on the fast food industry, but many are not even certain that the minimum wage increase applies to their particular restaurant or shop- especially in light of the last minute exemptions signed into law.

To be considered an employer of “fast food restaurant employees,” the restaurant employer must meet all three of the following requirements:

• The restaurant must be a “limited-service restaurant” in California which means that it offers no table service or very limited table service. In other words, the food or drinks offered to customers are paid for before they are consumed.

• The restaurant is part of a chain of at least 60 establishments in the entire nation. The term “establishments” refers to restaurants and not administrative buildings, warehouses, or food preparation buildings.

• The restaurant is primarily in the business of selling food and drinks that are ready to eat, which does not include food that must be baked, cooked, or heated at home. Ready to eat foods even includes those that are considered deserts such as ice cream, coffee, boba tea, pretzels, donuts.

There are some caveats employers should be aware of: simply because your shop also sells food that must be baked, cooked, or heated at home does not mean the restaurant is exempt from the minimum wage increase. In cases where a restaurant is primarily selling food and drinks for immediate consumption and earns most of its revenue from sales of food and drinks for immediate consumption, it probably would be required by the new law to pay the $20 minimum wage. Clearly, the fast food minimum wage will apply broadly to many fast food restaurants.

California has implemented a few exemptions but they are narrowly construed. We will discuss them in the next blog.