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Which fast food workers will get paid more in California?

By Jeanne Kuang | CalMatters

Say you work at a fast food restaurant or coffee shop that bears the name of a national chain. Under California law, you’re entitled to be paid at least $20 an hour starting Monday.

Say you work at one of those stores, inside a grocery store. The grocery store, your employer, is exempt under the law. You’ll keep getting your current wages.

But say you assemble burgers, scoop ice cream or prepare Frappuccinos at one of those stores, and it’s inside another store, but the bigger store isn’t a “grocery” because less than half of its revenues are made from groceries. What then?

According to the state of California, the store should pay you at least $20 an hour, but only for the hours you work in the fast food portion of the store. If you spend part of your shift checking out customers or stocking the shelves in the rest of the store, you’re only entitled to the regular minimum wage of $16 for those hours.

That’s according to an 18-item FAQ the Department of Industrial Relations published in March as California businesses prepare for the fast food minimum wage to kick in on Monday.

It’s not the only situation that confuses employers and workers alike.

To raise wages for fast food workers, the Service Employees International Union struck a deal last year with the International Franchise Association and California Restaurant Association that included owners of fast food chain locations but exempted those who operate independent restaurants.

The law covers all fast food restaurants that belong to chains with 60 or more locations nationally, roping in the unions’ targets: McDonald’s or Burger King and their franchise owners. More than 500,000 Californians — primarily women, immigrants and people of color — work in what’s known in the industry as “limited service restaurants.” Earlier this year SEIU estimated the law would apply to roughly 3,000 employers.

“The vast majority of fast-food locations in California operate under the most profitable brands in the world,” Joseph Bryant, SEIU’s executive vice president and a member of a new statewide fast food regulatory council, said in a statement today. “Those corporations need to pay their fair share and provide their operators with the resources they need to pay their workers a living wage without cutting jobs or passing the cost to consumers.”

But outside those national chains are numerous other food sellers and business arrangements, not all of which are directly addressed in the new law. Grocery stores and some bakeries are exempt, and this week, Gov. Gavin Newsom signed into law a carve-out for fast food places at airports, convention centers and hotels.

According to emails obtained by CalMatters in response to a public records request, a range of employers have been trying to figure out if they must pay $20 ever since the law was signed late last September.

In October, the Department of Industrial Relations received two inquiries from franchise owners asking whether they must comply with the law. One employer owned an Auntie Anne’s and a Cinnabon and believed to be selling pretzels and cinnamon rolls qualifying them for the controversial bakery exemption. The other owned an ice cream parlor.

“This clarification is imperative as to whether or not we will be financially able to open more locations at the proposed wage increase to $20 an hour,” the ice cream store owner wrote.

Both were forwarded to the department with a request for legal guidance by a staffer for Assemblymember Chris Holden, the law’s author. In recent weeks, Holden has been unable to answer reporters’ questions about why certain exemptions — such as a carveout for some bakeries — were included in the law. The department redacted responses to those emails under a public records exemption for attorney-client communications.

The ice cream store owner, Gabriela Campbell, was featured this week in a KCRA report detailing how she contacted multiple state offices and still isn’t sure if the law applies to her.

By December, employers were lawyering up.