Pizza Hut to cut 1,200+ jobs in California due to $20/hr fast food minimum wage hike

Over 1,200 Pizza Hut Delivery Drivers in ⁤California to Lose Jobs Due to Minimum Wage Increase

In a major blow to Pizza Hut delivery drivers in California, more than 1,200 of ‍them will be out of a job in the coming months. ⁣This unfortunate development comes as a result of the state’s fast food minimum wage increase.

Several Pizza Hut franchises in California have made the decision to‌ eliminate delivery driver positions and instead rely on third-party ​delivery companies like DoorDash, GrubHub, and Uber Eats. This move comes in response to the ​state’s minimum wage for fast food workers, which is ‍set to increase to $20 in April, as reported by CBS News.

The layoffs, which are scheduled ‍to begin‌ in February, will primarily impact Pizza Hut delivery drivers in Los Angeles, Orange, and Riverside counties.

One affected delivery driver expressed his disappointment, stating that he⁤ was offered a mere $400 as severance pay if he continued working until February 5, the date he was informed he would be laid off. He described this amount as a “slap on the face,” considering his nine-plus years of service⁣ to‍ Pizza Hut.

The minimum wage increase for fast food workers in California was implemented through Assembly Bill 1228, signed into law by ‌Democratic Governor Gavin Newsom in September. Following the signing of the⁣ bill, other fast food chains such as McDonald’s and Chipotle announced plans to raise​ menu prices to offset the wage‍ hikes, according to Business Insider.

It is worth noting that in 2022, Governor Newsom signed the Fast Food Accountability and Standards Recovery Act, ⁤which aimed ‍to raise the minimum wage for fast food⁤ workers to $22 per hour. However, this law faced opposition from fast food corporations, who successfully placed a referendum on ⁤the ballot. Ultimately, ‍a California court froze the minimum wage law, allowing opponents to gather signatures against the increase.

Assembly Bill 1228 then replaced the Fast Food Accountability and Standards Recovery Act, setting the ⁤minimum wage for fast food workers at $20 per hour. This wage increase affects approximately 550,000 fast‌ food workers and 30,000 restaurants in California, according⁣ to CBS News.

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Yum! Brands, the​ parent company of Pizza Hut, KFC, and Taco Bell, acknowledged the⁢ changes in delivery services at certain franchise restaurants in California. They⁣ emphasized that their franchisees operate independently and comply with all regulations while striving to‌ provide⁢ quality service and food to customers through carryout and delivery.

What are the potential consequences of replacing ‍in-house delivery drivers with third-party delivery ⁣services?

E” and expressed concern⁤ about finding another job ‍in such a‌ competitive market. Another ⁤driver voiced similar sentiments, questioning‌ why the franchise could ‍not afford to ⁣pay their employees ⁤a fair wage.

The ⁢decision ‍by Pizza Hut franchises to eliminate delivery driver positions⁣ in California⁢ is not ⁤an isolated incident. In⁤ fact, this trend has been observed across the fast food industry in response to minimum wage increases in various states.‌ The rise ​in ⁣labor costs associated with higher minimum wages has led ‌many franchises to explore alternative delivery ⁢solutions, such as ​third-party ​companies, to reduce ​expenses. This not only affects the livelihoods of delivery drivers but also raises ‍concerns about the ⁢quality and reliability of these third-party services.

Furthermore, while the minimum wage increase aims ‍to provide workers with higher incomes, it⁢ may⁢ inadvertently⁢ result in job losses ⁢and reduced job opportunities. Businesses, especially those ‍in the fast⁣ food industry with slim profit margins, are forced to make tough decisions to stay afloat ⁤in ​the face of rising labor costs. In this​ case, Pizza Hut franchises have chosen to eliminate in-house delivery driver positions to ⁢mitigate⁤ the impact of increased wages.

The future for former ⁣Pizza ‌Hut delivery drivers in California may be uncertain, but it is essential to consider the broader implications of minimum‌ wage increases. Policymakers must carefully ⁢balance the desire for higher wages with the potential ramifications for small businesses and workers. Additionally, the impact on the gig economy and the reliance on⁤ third-party delivery ‍services also warrant further examination.

In summary, the increase in the minimum wage for fast food workers in California has led ​to ⁢over 1,200 Pizza ​Hut delivery drivers losing their jobs‌ and being ​replaced by third-party delivery services. This decision highlights the challenges faced⁣ by businesses ‍in ⁢adapting to increased labor ⁣costs and raises ‌concerns about​ job loss and the quality of alternative delivery options. ⁣As⁤ the minimum wage conversation continues,⁣ it is ‌crucial to understand the potential consequences for ⁢both workers and employers.