Pizza Hut Workers Face Layoffs Due to California’s Minimum Wage Increase

Thousands of Pizza Hut workers in California are bracing for layoffs on December 27th as a result of a new law that will raise the fast-food minimum wage in the state. The law, known as Assembly Bill 1228, was introduced by Assemblyman Chris Holden and signed into law by Governor Gavin Newsom in September. It is set to go into effect in April.

Layoffs Planned Ahead of Minimum Wage Increase

Pizza Hut is expected to lay off over 1,200 delivery drivers in Los Angeles, Orange, and Riverside counties in preparation for the wage increase. The fast-food minimum wage will be raised by $4 to $20 per hour. The layoffs are scheduled to take place throughout February, prior to the pay increase taking effect.

Pac Pizza, LLC, which operates as Pizza Hut, has filed a Worker Adjustment and Retraining Notification (WARN) Act notice with the state’s Employment Development Department. This notice confirms their decision to eliminate first-party delivery services.

Transitioning to Third-Party Delivery Apps

In addition to Pizza Hut, another franchise called Southern California Pizza Co. plans to lay off 841 drivers. These layoffs will affect drivers in various locations, including Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon, and the Reno-Tahoe area.

Pizza Hut franchises are now preparing to rely on third-party delivery apps like DoorDash, GrubHub, and Uber Eats for pizza and food deliveries.

Response from Yum! Brands

Yum! Brands, the parent company of Pizza Hut, Taco Bell, and KFC, has not yet commented on the layoffs. However, they previously stated that their franchisees operate independently and comply with all regulations while providing quality service and food to customers.

Impact on Other Food Chains

It has been reported that other food chains, including Chipotle and McDonald’s, plan to raise menu prices to offset the costs of higher wages in California.

The Benefits of the Minimum Wage Increase

Assemblyman Chris Holden believes that the wage increase will greatly benefit workers by allowing them to better support their families and improve their quality of life. The law not only raises the minimum wage but also establishes a Fast Food Council. This council will address employer concerns and ensure that fast food workers have a voice in raising industry standards.

The council will consist of representatives from the fast food industry, franchisees, employees, advocates, and members of the public. Its responsibilities will include developing standards for wages, working conditions, and training for fast food workers.

Assembly Bill 1228 will impact over 550,000 fast-food workers and approximately 30,000 restaurants throughout California.