The study “Wage Theft in the Fast Food Industry: Minimum Wage Violations in Los Angeles”, was released by the Workplace Justice Lab in February 2025. Using data from the Current Population Survey (CPS) managed by the National Bureau of Economic Research, the authors Daniel Galvin and Jake Barnes noted that workers in the Los Angeles metropolitan area studies are facing significant increases in labor violations that alternative or comparable industries. 

The authors estimated that wage theft is resulting in the loss of up to 16% of wages, an average of $3,500 per employee. 

California Minimum Wage 

The California minimum wage is currently $16.50, up from $16.00 in 2024.  Using survey data the authors show that as the California minimum wage has increased since 2016, the workers reporting wages below the minimum wage has also grown. 

Fast food workers reported incomes below minimum wage 5% of the time in surveys in 2015, this figure is now 25% for 2024.  Other industries have followed a similar pattern, although at reduce rates.  Restaurant workers report below minimum wage 18% in 2024 vs 2% in 2015, and retailer workers reported wages below the minimum for their hours worked 13% in 2024 vs 1% in 2015. Other commonly affected industries include transportation, warehouse workers, and health care support staff. 

California Fast Food Minimum Wage 

As of April 2024, California Assembly Bill 1228 (AB 1228) established a minimum wage of $20 for fast food workers, if the fast food establishment is a chain with 60 locations in the United States.  Exemptions exist for locations such as airports and ballparks and stadiums. 

California has an estimated 500,000 or more workers affected by AB 1228.  If 25% of these workers are experiencing wage theft in 2024, that would imply a total of 125,000 workers being paid below the AB 1228 $20 minimum wage.  The authors estimate that for the Los Angeles area alone,  fast food worker wage loss could be up to $260,000,000 for the measured period of 2019-2024. 

California Worker Wage Increases 

Despite the report of increasing wage theft, workers have also seen wages increase.  The household surveys show that industries including fast food have seen large wage increases, with fast food workers showing the largest increase at 96% wage growth. 

In 2009, fast food workers reported incomes of just $9.33 on average, which has now doubled to $18.27.  Among compliant companies subject to and following AB 1228, workers report average wages of $21. 

In the survey data, the authors reported Los Angeles fast food workers who were underpaid reported an average income of just $12.90 from 2019-2024. The average minimum wage they would be entitled to was $15.43 across those years, and would be $16.50 today or $20 depending on AB 1228 eligibility. 

Part of the possible explanation of rising wage theft is these rising wages. Businesses may be slow to implement new minimum wages, workers frequently do not know the laws that apply to them, especially local county or city wage laws, and businesses facing rising wages may become more likely to commit wage theft to slow the rate of wage growth. 

California Worker Rights 

California has robust protections for workers who experience wage theft, including protections from retaliation, back pay, liquidated damages (double pay for what is owed) and other penalties. 

However, recent studies of fast food workers showed that up to 88 percent failed to know about all their rights or the laws, and that they can contact a private attorney to represent them. 

California Employment Attorney 

If you believe you are not being paid for all of the time you have worked, are not being paid the proper minimum wage, or are not being paid the overtime due to you, we invite you to schedule a consultation with an employment law attorney in our California, Texas, Washington D.C. or Puerto Rico offices. Schneider Wallace Cottrell Kim LLP is a national law firm that represents employees in a wide range of employment law cases, including class action lawsuits involving the failure to pay wages, overtime pay and commissions. Contact us at 1-800-689-0024.