California Restaurants Shedding Jobs Amid Wage Hikes

( – California restaurants are shedding jobs as new laws mandating wages of $20 an hour loom. The legislation will take effect in April, and outlets, particularly pizza parlors, have begun reducing employee numbers to cover the extra cost.

Pizza Hut and Round Table Pizza, a 400-outlet chain on the West Coast, said they would lay off around 1,280 staff, with Pizza Hut issuing notices in February. Southern California Pizza, which operates in Los Angeles, will make around 840 delivery drivers redundant and is offering a $400 severance pay.

Brian Hom, who owns two Vitality Bowl restaurants in San Jose, noted that the consequences of the new legislation reach further than just layoffs. He said his employee reduction from four to two means longer waiting times for his customers and higher prices for his meals. Mr. Hom confirmed to Fox News that he could not hire any more workers.

Republican California Assemblymember James Gallagher said he warned Democrats that the laws would cause job losses and increase pressure on the industry. “They ignored us, and here we are with the highest unemployment rate in the country, poised to get even worse,” he said.

The new legislation, which takes effect on April 1, increases the hourly rate for workers in companies with at least 60 outlets nationwide. The previous rate was $15.50, already one of the highest in the country, but it will now increase to $20. Governor Gavin Newsom signed the legislation last September and simultaneously created a new Fast Food Council, which will set labor standards and future wage increases independently of state government.

Governor Newsom was criticized last year for exempting firms that prepared and baked bread on-site, meaning the laws did not apply to major Newsom donor Greg Flynn, owner of two dozen Panera Bread branches throughout the state. Following an outcry, Newsom changed course, and in February, he said Penera would need to pay the new wage increase after all.

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