by Evan Symon at californiaglobe.com
Multiple Pizza Hut operators throughout California announced on Tuesday that they would be laying off hundreds of drivers before the new state minimum fast food wage of $20/an hour comes into effect on April 1st.
The new law, Assembly Bill 1228, has been one of the most contentious of the year. Originally, the bill would have raised the minimum to $22 an hour and hold franchise corporations accountable for labor law violations at individual locations. In addition, thanks to a new Fast Food Council created from a new law signed last year (AB 257), benefits like paid leave and predictive scheduling would be introduced. Fast food companies swiftly took action, to hold a referendum on the minimum wage, as well as more electronic kiosks going up to replace cashiers.
After months of back and forth, it was agreed earlier this year that AB 1228 would be altered to have minimum wage for fast food workers bumped only to $20 an hour rather than $22, with local governments prohibited from raising it even further, in exchange for dropping the referendum as well as other smaller provisions.
Following passage in October, fast food companies and groups have been warning of dire consequences. This has included more automation, higher prices, reliance on third party companies, and numerous layoffs to help stay profitable.
“The law is going to have a wage impact for our California franchisees,” said McDonalds CEO Chris Kempczinski during an earnings call in late October. “I don’t think at this point, we can’t say exactly how much of that is going to work its way through pricing.”