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California Microenterprise Home Kitchen Operation

This law has not gone into effect, so you can't use it yet!

California’s bill (AB 626) which allows for “microenterprise home kitchen operations” was passed on September 18th, 2018 and will go into effect on January 1st, 2019.

Although the law is a first-of-its-kind and has been described as a “game-changer”, the reality is that the bill is so severely limited, it is unlikely to make much of an impact on anyone in the state. It sought to avoid the governmental red tape that commercial food establishments face, but after many amendments, the red tape ended up getting baked right into the law.

However, there are a lot of good things to say about this law. For one, it is a new step forward in this ever-evolving cottage food movement. This law should allow some people to start their own mini-restaurants from home and sell virtually any kind of food. Not only are the food restrictions few and far between, but there are no labeling requirements whatsoever. In some ways, it gives a new meaning to the term “food freedom” and shows that running an at-home restaurant is actually something that government officials are starting to consider.

If it sounds too good to be true, there’s a catch. Many catches, in fact. In order to use this law, you must meet all of the following requirements:

  • Live in a county/city that creates an ordinance for it
  • Make and sell your food on the same day
  • Sell directly to customers (no indirect sales)
  • Sell no more than 60 meals per week
  • Stay under the $50,000 annual sales limit
  • Not be a cottage food operation

The first limitation is, by far, the biggest. Time will tell, but health departments most likely don’t agree with this very progressive law, and are unlikely to create an ordinance for it. But even if they do adopt it, many Californians may have to wait until 2020 or later before their county’s ordinance gets passed.

How did California end up with a law that pigeon-holed itself into being nearly unusable? The reason is because the bill was started by a group that had a very specific purpose, for a specific type of food producer, for a specific section of the state. In the middle of 2016, chefs on Josephine, a popular web app for home cooks in Berkeley, were shutdown by health officials. The creators of Josephine tried to adapt by creating the C.O.O.K. Alliance and initiating this bill in early 2017, in hopes that the new legislation would allow their platform to legally exist. When the bill got delayed for a year, Josephine ran out of funds and closed in early 2018. But only six months later, the bill did pass, and unsurprisingly, it is most suited for a company exactly like Josephine. Berkeley will probably be one of the few counties that quickly passes an ordinance, and perhaps a number of home cooks there will start to use this law.

Cottage food laws exist to help entrepreneurs start small with their idea and prove their food business concept. In a way, this law is like that, except for tech startups: it exists to start small with the mini-restaurants-supported-by-a-web-app idea and try to prove that business concept. Despite its limitations, it’s better than nothing, and this law provides a stepping stone for future amendments which may remove some of the barriers and make it more accessible to all.

Selling

If your products contain allergens, you must list them on your advertisements. The 8 FDA-recognized allergens are milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, and soybeans.

Delivery must be made within a safe time period, and food must be held at a safe temperature. Delivery may only be made by you, your employee, a family member, or a household member. In other words, you cannot use a delivery service (like Postmates) to deliver your products. You must have a copy of the driver’s license on file for any delivery driver.

Although you cannot sell through a third-party, you can sell via an online platform. However, that online platform needs to register with the health department and follow a number of rules (section 114367.6 of the bill). This likely means that you would not be able to use a generic online platform (like Facebook) to sell your products.

If you have a permit with your county, but a city in your county has created an ordinance preventing their residents from starting microenterprise home kitchen operations, you can still sell in that city.

Allowed Foods

Prohibited Foods

You can make virtually anything with your business, BUT you must prepare and serve it on the same day. This law is mostly intended for people operating a food service establishment for meals, rather than kitchen staples (like mustard, coffee beans, spice mixes, nuts, jellies, etc). If your business is focused on non-perishable products, you would likely be better off starting a cottage food operation.

You cannot make anything that requires a HACCP plan. You can see the full list of disallowed items here, but essentially you cannot utilize certain methods to preserve food for long-term storage. Most notably, this would prevent canned goods that are acidified foods, as well as some dehydrated foods. For instance, beef jerky and canned pickled goods would not be allowed. You would likely not be affected by this restriction, since you are required to prepare and serve food on the same day, but it could become a factor if your recipe used one of these homemade items as an ingredient (such as home-canned pickled vegetables).

You cannot use non-commercial meat or fish in your products.

You cannot sell raw oysters, raw milk, or raw milk products.

Limitations

Sales are limited to $50,000 per year
This amount is supposed to increase annually, based on inflation.
Sales are limited to 30 meals per day
If you are not selling full meals, then you are limited to the "approximate equivalent of meal components when sold separately". For instance, you could sell a serving of pasta, a side of potatoes, and a side of corn to three different customers and still count it as only "one meal".
Sales are limited to 60 meals per week
If you are not selling full meals, please see above.

Before you can use this law, your county must create an ordinance allowing microenterprise home kitchen operations. This could be, by far, the biggest limitation you face, since there is a good likelihood that your county may never allow these businesses, and even if they do, it may take months, or sometimes years, to create an ordinance. Until your county creates an ordinance, you cannot use this law.

Despite the 30 meal per day and 60 meal per week limits, the health department has the ability to reduce these limits, based on your home’s production capacity.

You cannot use your home kitchen for both a cottage food operation and a microenterprise home kitchen operation.

Business

Permit

Each county’s health department will have its own permit and process, but at a minimum, you should have to provide this information:

  • All types of food products you will be handling
  • The procedures and methods you will use during food preparation
  • The procedures and methods you will use for cleaning and/or disposing of equipment
  • How you will maintain safe food temperatures during pickup and delivery
  • The days and times that you will be operation your business

The cost of a permit will vary by county. A county may require an annual renewal for permits. A county may only designate one department to collect fees and process an application.

The permit should be displayed while your business is in operation.

Home Inspection

Before you are offered your permit, your home will be inspected by a health department official to determine if your home meets the requirements for this law.

Unlike other food facilities, you will not have routine inspections. You should not have more than one inspection per year, unless there is a food safety issue.

Food Safety Certification Examination

As the owner of the business, you must take a food safety certification exam.

Food Handler Card

Any non-owner who is involved in the business (your employee, household member, or family member) must get a food handler card. This basic training course usually costs around $15 and takes a few hours to complete online.

Zoning Requirements

A city or county may not restrict your business for zoning reasons. Often zoning is managed through the county’s planning division.

However, you can be restricted if you place any signage on your property advertising your business, and/or you make too much noise and neighbors complain.

Workplace

Food facilities typically need to use commercial kitchens, which have dozens of requirements, many of which are impractical for home kitchens. This law exempts you from many of the standards for commercial kitchens, but it does specify some rules in lieu of the exemptions (the full list is in section 114367.1(b) of the bill):

  • Your sinks must have hot and cold water
  • If you display food that is uncovered or unprotected, it cannot be sold or served to guests
  • Your food preparation area must be well-lit while you are preparing food
  • Linens used for your business must be laundered separately from your personal laundry
  • Clothing and other personal items not typically found in the kitchen should be placed away from your kitchen
  • Gases, odors, steam, heat, grease, vapors, and smoke must be able to escape from your kitchen
  • Your kitchen and bathroom’s floors, walls, and ceilings must be smooth and easily cleanable

In addition to the exemptions, some requirements are not exempt:

  • You must post handwashing signs at the sinks in your kitchen and bathroom
  • You must have a meat thermometer and a refrigerator thermometer

You can make your food in an open-air barbecue or outdoor wood-burning oven.

You need to have your permit on display while your business is in operation.

Resources

Law Dates
January 2019
AB 626

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