In the 11th hour, the California Department of Industrial Relations has updated its FAQs to indicate that the April 1 minimum wage increase for fast food workers will also increase the minimum salary threshold for exempt executive, administrative, and professional (EAP) employees in fast food restaurants.
The new minimum salary for these employees will be $83,200 per year. This increase is happening because under California law, EAP employees must earn a monthly salary of at least two times the state minimum wage, and the new $20 rate will function as the state minimum wage for fast food restaurant employees.
As a reminder, the law only applies to restaurants that are part of a fast food chain with 60 or more locations.
Affected employers have two options:
Ensure that employees in EAP positions are paid $83,200 per year, or
Reclassify these employees as nonexempt and provide them with the rights and benefits that nonexempt employees are entitled to (overtime, breaks, lunches, and reporting time pay, to name a few)
Of note, there’s legislation currently pending that would create additional exemptions to the law if signed. We’ll let you know about any significant changes.