California fast food restaurants facing an April deadline for raising workers’ minimum wage to $20 per hour have already started cleaning house and raising prices.
The Wall Street Journal reported that these establishments and even some high-end restaurants are slashing staff. Businesses are protecting the bottom line from state mandated wage increases, and it’s workers and customers who are paying the price.
Pizza chains in particular are taking drastic steps ahead of the financial burden imposed by California. Some Pizza Hut locations canceled their delivery services because of new requirements from the Worker Adjustment and Retraining Notification Act.
Pizza Hut released a statement explaining the shift. “Where select California franchisees have elected to make changes to their staffing approach, access to delivery service will be available through Pizza Hut’s mobile app, website and phone ordering.”
One Pizza Hut driver, 29-year-old Michael Ojeda of Ontario, California, told the Journal that he was told in December that he would no longer be employed by the restaurant come February.
Ojeda noted, “Pizza Hut was my career for nearly a decade and with little or no notice it was taken away.”
Fast Food Restaurant Owners Brace As $20 Minimum Wage Law set To Go Into Effect Next Week.
New law causing more layoffs, reduced hours across state.@CaliforniaGlobe https://t.co/BBF222iBjF pic.twitter.com/fXMHPqqGGb
— California Globe (@CaliforniaGlobe) March 26, 2024
One outfit, Southern California Pizza Co., already announced the pending layoffs of 841 drivers statewide.
The outlet noted that Round Table Pizza will slash 73 driver slots, and Excalibur Pizza LLC announced that the majority of its fired workers will be drivers.
Round Table parent company FAT Brands released a statement to Fox Business claiming that the jobs being slashed are moving to third-party delivery services.
The statement read, “As you know, many California restaurant operators are following the same approach due to rising operating costs. We anticipate third-party delivery providers in turn will see a boost in their businesses, which will require additional staff on their end.”
The company admitted that customers could see an increase in delivery fees and higher prices for their products.
California Assembly Republican leader James Gallagher told Fox Business that Democrats were warned that their ill-conceived move would cost valuable jobs. “Restaurants are struggling to stay above water, and Democrats just threw them an anvil.”
The new $20 minimum wage will be enforced with fast food chains boasting 60 or more locations and takes effect April 1.
