Amid California’s implementation of a new $20 minimum wage for fast-food workers, more than 1,200 Pizza Hut delivery drivers are poised to lose their jobs. The state’s move has prompted significant changes in the delivery sector of the renowned pizza chain. Two major Pizza Hut franchisees, spanning numerous outlets in California, have decided to terminate in-house delivery services, leading to the elimination of these positions.
The decision to axe these jobs comes in the wake of Governor Gavin Newsom’s legislation, which mandates a $20 hourly wage for employees in large fast-food chains from April. Consequently, these franchise owners intend to pivot to third-party delivery platforms such as DoorDash and UberEats.
Set to take effect in February, the layoffs will impact Pizza Hut drivers across various regions, including Sacramento, Palm Springs, Los Angeles, and more. Notices issued under the federal Worker Adjustment and Retraining Notification (WARN) Act have confirmed the impending job cuts.
Expressing discontent, an anonymous Pizza Hut driver highlighted the paltry $400 severance pay offered after nine years of service, labeling it as inadequate. This move showcases the ongoing clash between Newsom and fast-food chains over wage increments.
The new law, Assembly Bill 1228, reduces the earlier proposed $22-an-hour wage to $20, affecting over half a million fast-food workers and thousands of restaurants in California. This transition reflects the influence of labor unions and the challenges faced by the fast-food industry in balancing increased labor costs without compromising service quality.
Both McDonald’s and Chipotle had earlier hinted at potential menu price hikes to accommodate rising labor expenses, a trend expected to resonate across twenty-two states increasing their minimum wages at the onset of 2024.
