Ahead of California’s new minimum wage law for fast food workers, Mod Pizza, a national pizza chain with 500 locations, closed five of its establishments in the state at the end of March. This move was part of a larger closure of over two dozen stores nationwide. The specific reason for the closures was not disclosed by the company, but employees from one of the shuttered locations in Clovis speculated that the timing, just weeks before the wage increase, was more than coincidental.
The new legislation, which took effect on April 1, raised the minimum wage for employees at restaurants with at least 60 locations nationwide, excluding those that make and sell their own bread, from $16 to $20 per hour. This increase translates to an annual salary of $41,600 for full-time employees. This change represents a significant shift from the 2022 median wage for fast food workers in the U.S., which was $13.43 per hour, and in California, where it was slightly higher at $16.60 per hour.
Governor Gavin Newsom, who signed the bill into law, highlighted that California is home to over half a million fast food workers. The legislation not only increases their wages but also establishes a “Fast Food Council” with representatives for both workers and employers. This council is empowered to approve further pay raises and set standards for working conditions, aiming to ensure fairer wages, safer and healthier working environments, and better training for fast food workers.
However, the wage increase has led some food chains to lay off workers in anticipation of the financial impact. Fosters Freeze, another fast food establishment in the state, shut down its operations, with former assistant general manager Monica Navarro expressing shock at the sudden closure. The owner of Fosters Freeze cited the inability to absorb the wage hike as the reason for the closure.
These closures and layoffs have sparked discussions about the potential repercussions of the minimum wage increase on the fast food industry in California. Some workers, like Michael Ojeda, a Pizza Hut driver in Ontario, California, have already felt the impact, receiving notice of termination months in advance of the law’s implementation. Ojeda, who considered Pizza Hut his career for nearly a decade, expressed disappointment and frustration over the lack of notice and the abrupt end to his employment.