Two large Pizza Hut operators in California are laying off all their delivery drivers ahead of a new state law that raises the minimum wage for fast-food workers to $20 an hour, Business Insider reports.
The layoffs impact hundreds of Pizza Hut locations across the state including Los Angeles, Orange, Riverside, Ventura and San Bernardino counties and Sacramento, and involve more than 1,200 in-house delivery drivers.
The job cuts will take place through February, according to federal employment notices obtained by Business Insider.
The new minimum wage law takes effect in April.
“PacPizza, LLC, operating as Pizza Hut, has made a business decision to eliminate first-party delivery services and, as a result, the elimination of all delivery driver positions,” a federal WARN Act notice filed by the franchisee said.
The Worker Adjustment and Retraining Notification Act (WARN) requires employers to provide notification 60 calendar days before mass layoffs.
The second Pizza Hut franchisee, Southern California Pizza Co., is laying off roughly 841 drivers, according to another WARN Act notice obtained by Business Insider.
The current minimum wage in California is $16 per hour. The increase to $20 comes after the passage of Assembly Bill 1228 which aims to help fast-food workers cope with the rising cost of living and inflation in the Golden State.
The bills’ authors say a large percentage of fast-food restaurant workers are living at or below the federal poverty line, and a significant number are enrolled in the state’s safety net programs.
Fast-food chains Chipotle and McDonald’s have already announced they plan to raise menu prices in California to offset the higher cost of worker compensation.
