Most of you who are directly affected already know this, but AB 1228 goes into effect today, April Fool’s Day, requiring employees working at “limited-service restaurants” in California be paid at least $20 an hour if the restaurant is part of a chain comprising at least 60 locations NATIONWIDE.
VITAL to note – the required salary of an exempt employee increases when the STATE minimum wage increases. So when Los Angeles, San Francisco, Santa Monica, West Hollywood or any of these municipalities require a higher minimum wage than the state, it does NOT impact the required salary for exempt employees.
However, AB 1228 IS a state law, raising the minimum wage for certain employers. Therefore, there is a NEW salary for exempt employees of these covered establishments. The new salary requirement for exempt employees covered under AB 1228 is $83,200.
There are several relatively new exemptions under AB 1228, including restaurants that only sell bread, restaurants in certain sized “grocery establishments,” and restaurants located in hotels, an airport, an event center (over 20,000 sq feet or having more than 1000 seats, a theme park, museum, or gambling establishment. There are a few very specific others.
Of course, as we all know, large limited-service restaurant groups will not be the only ones impacted by this new law. Anyone competing for these employees may feel the pressure to raise their rates, even those outside hospitality. But you don’t need me to tell you all how these dominoes fall.
Again, there are other nuances under this law. If you are impacted and need assistance, you know where to find me. I’m never retiring, after all.
