| Update Applicable to: | Effective Date |
| All Fast Foot Employers in California | Expected Vote: April or May 2025 |
What happened?
On January 23, 2025, the Fast-Food Council met to discuss the next CPI-W increase despite opposition from franchise owners. By the end of February, the Council approved a motion to consider a 3.5% cost-of-living adjustment at an upcoming meeting in April or May, with a final proposal to be discussed in late July.
Overview:
The fast-food industry is bracing for another potential minimum wage hike.
- As the first anniversary of California’s fast food minimum wage approaches, the prospect of another pay increase for workers is looming.
- The council, consisting of employers and workers, can raise pay levels annually by up to 3.5% to keep up with inflation and address working standards.
- The Council is considering another increase to $20.70 per hour, with a final vote expected in April or May 2025.
Additional Details:
California’s current minimum-wage law, which went into effect in April 2024, required fast-food restaurants with 60 or more locations nationwide to pay workers $20 an hour, $4 higher than the state’s minimum wage.
- If the proposed wage hike is approved, fast-food employers must quickly adjust labor budgets, pricing strategies, and compliance measures.
- More than 1,000 local restaurant owners wrote an open letter to Governor Newsom, urging the Fast-Food Council to reject any additional wage increases for fast-food workers.
- Employers should plan for potential wage hikes affecting labor costs and operational budgets.
“Please mark the effective date on your calendar as a reminder to be fully prepared and ready to ensure compliance with applicable laws and regulations.”
Source References
Resources
Need help understanding how changes to employment laws will affect your business?
Learn more about how Vensure's California PEO services can help you navigate complex employment laws and keep your business compliant.
This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.
