WASHINGTON (dpa-AFX) - California increased the minimum wage for fast-food employees to $20 per hour on April 1, 2024, making them the highest-paid workers in the United States.
While the wage increase aims to enhance the quality of life for over half a million fast-food workers, unintended consequences may arise, including restaurant closures, job cuts, reduced hours, and increased automation to lower expenses.
Following the enactment of the law, several California food chains such as Pizza Hut, Southern California Pizza, Round Table Pizza, and Vitality Bowls have announced layoffs. Some restaurants are exploring automation through order-taking kiosks to offset costs.
Moreover, consumers are expected to bear the brunt of the rising wages through higher meal prices.
The Service Employees International Union reached an agreement with the International Franchise Association and California Restaurant Association last year to boost the wages of fast-food workers. However, the agreement only covers owners of fast-food chain locations and excludes operators of independent restaurants.
The legislation outlines specific criteria for what qualifies as a fast-food restaurant. These establishments must provide limited or no table service, require customers to order and pay before being served, be part of a chain with at least 60 locations nationwide, and primarily sell food and drinks for immediate consumption. Exceptions to the law include restaurants situated within large grocery or department stores and those in airports, hotels, theme parks, museums, and casinos.
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