In California, fast food employees are losing their jobs as more restaurant companies get ready to pay the new $20 minimum wage that will take effect the next week.
Pizzerias make up the majority of restaurants that are closing, according to a Wall Street Journal investigation. According to the article, several companies intend to halt hiring, reduce hours, and eliminate hundreds of jobs.
Democratic Governor Gavin Newsom signed the Fast Act in September, requiring fast food restaurants with 60 or more outlets nationally to match that wage hike. The healthcare industry, which will also enjoy a raise in salaries in June, and labor groups pushed for this legislation.
In September, Newsom declared, “This is a big deal,” joined by union members. “That’s 80% of the workforce.”
More than 1,200 delivery positions were eliminated by Pizza Hut in December. According to Fox Business, a few Pizza Hut locations in California also sent warnings to the state announcing that they would be completely stopping their delivery services.
“The franchisee is giving a third party access to their delivery services. Pizza Hut told Fox that “we view this as a transfer of jobs, even though it is unfortunate. As you know, many California restaurant operators are following the same approach due to rising operating costs.”
According to a state filing obtained by The Wall Street Journal, Round Table Pizza expects to lay off about 1,280 delivery drivers in the Golden State this year, and Excalibur Pizza plans to lose 73 driver jobs in addition to 21% of its workers in April.
According to The National Law Review’s analysis of the measure, companies that “feature ice cream, coffee, boba tea, pretzels, or donuts” may be considered “fast food restaurants covered by the law.” Similar companies that sell drinks and candies may also be subject to the law.
According to Bloomberg, Greg Flynn, who controls all of the Panera franchises in California, attempted to circumvent the state’s new requirement earlier this year by clinging to the legal fiction that establishments that bake their own bread are exempt from raising employee pay.
Calling the assertion “absurd,” Newsom’s office informed the Los Angeles Times that the restaurant chain would not recognize such an exception.
