California: First layoffs due to new minimum wage for fast food workers | MIXING

Minimum wage for Fast food workers in California will increase by 2024, benefiting most of the Golden State’s 500,000 fast food workers. However, this measure has already begun to cause mass layoffs.

On September 11, an agreement was reached that ended the standoff between industry and unions over wages and working conditions. AB 1228 is expected to benefit nearly half a million fast-food chain workers, with at least 60 restaurants scattered across the country, excluding restaurants that bake and sell their own bread, such as Panera Bread. However, wage increases of more than 25% are forcing companies to take tough measures.

WHEN DO WAGE INCREASES FOR FAST FOOD WORKERS APPLY?

Currently Fast food workers in California earn $15.50 an hourbut since then Starting April 1, 2024, the minimum wage will be $20.. The council may propose further increases through 2029, adjusted for annual inflation.

This new Council would only have the power to set wages, but not to set industry labor standards for fast food restaurant workers, as was intended with the Fast Food Council.

The agency may make recommendations on working conditions standards to various government agencies.

MASS FAST FOOD EXERCISE IN CALIFORNIA

Major California Pizza Hut operators have announced they will lay off all delivery drivers due to a new law raising the minimum wage for fast food workers to $20 an hour. Business Insider estimates that more than 1,200 delivery drivers will be affected, affecting hundreds of the restaurant chain’s locations across the state, including Los Angeles, Orange, Riverside, Ventura and San Bernardino counties, Business Insider reports. . The layoffs will take place in February 2024, according to federal job notices obtained by Business Insider.

“PacPizza, LLC, doing business as Pizza Hut, has taken over business decision to liquidate its own delivery services and, as a consequence, the elimination of all positions of delivery drivers” was mentioned in the Federal WARN Act notice filed by the franchisee.

A second Pizza Hut franchise, Southern California Pizza Co., also plans to lay off 841 drivers. The layoffs will affect drivers at Pizza Hut restaurants in Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon and the Reno-Tahoe area, among others.

How will distributions be carried out?

Pizza Hut franchisees will outsource pizza and food delivery through apps like DoorDash, GrubHub and UberEats.

PRICES IN CALIFORNIA ARE HIGH

Chains Chipotle and McDonald’s have announced that among their plans they are considering raising menu prices in the state to try to offset the higher costs that raising the minimum wage for their workers will entail.

WHY ARE COMPANIES AGAINST THE NEW SALARY?

The main opponents of the new pay for delivery drivers in California are food delivery companies such as Uber Eats, DoorDash and Lyft, as well as employer unions such as the California Chamber of Commerce. Among his arguments:

• Rising costs for consumers and restaurants
• Job losses
• Undermining the flexibility and autonomy of delivery drivers

MORE ABOUT SALARY

HOW DOES THE LOCAL MINIMUM WAGE APPLY?

In total, 30 states and several cities have set their own minimum wage rates that are higher than the federal one. If federal, state, and local minimum wages differ, the higher wage rate applies.

WHAT IS THE OVERWORK PAY IN THE UNITED STATES?

The Fair Labor Standards Act (FLSA) provides the right to overtime pay. Most employees are entitled to a special overtime pay rate for any hours worked totaling more than 40 hours in one workweek.

The rate of pay for overtime work shall not be less than one hundred fifty percent (150%) of the regular rate of pay.

WHAT ARE THE SANCTIONS FOR FAILURE TO COMPLY WITH THE MINIMUM WAGE?

If you have not received full payment of your minimum hourly wage, the Department of Labor can sanction employers in two ways.

• Money orders: The employer may be ordered to pay back wages, interest on late or nonpayment, liquidated damages, and may be fined.
• Criminal proceedings: Employers who do not comply with the Minimum Wage Law are subject to criminal prosecution and sanctions. Fines for violating the rule can amount to up to 200% of the missing salary. They may also have to pay 16% interest on unpaid wages.