As new minimum wages are introduced, companies fight back with fees and layoffs

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Pizza Hut to lay off thousands of California workers

Pizza Hut to lay off thousands of California workers 02:57

An estimated 10 million low-paid people are get a raise in the new year, but not all employers are taking higher minimum wages in stride in 22 states.

Pizza Hut is laying off more than 1,200 delivery workers in California before the nearly 30% increase in the state's minimum wage, from $16 to $20 an hour. PacPizza, which does business as Pizza Hut, and Southern California Pizza Co., another Pizza Hut franchise, have given notice of layoffs affecting workers in cities across the state, Business Insider reportedciting notices filed with the state.

At least one Pizza Hut franchisee also charges a service fee, citing the increased cost of operating in California by adding an 8.5% service charge to the bill, according to to Los Angeles Times.

“Pizza Hut is aware of recent changes to delivery services at certain franchised restaurants in California. Our franchisees own and operate their restaurants independently,” a Pizza Hut spokesperson told CBS MoneyWatch in an emailed statement. electronic. “Where franchisees have opted to make changes to their staff, access to delivery service will continue to be available through the Pizza Hut mobile app, website and phone ordering,” the spokesperson added.

Fast food chains, including McDonald's, have already said menu prices would increase in the state to offset higher labor costs.

Los Arcos Dorados said in November that its menu prices increased just over 10% nationally this year, and CEO Chris Kempczinski told analysts on an earnings call that “there will certainly be a near-term impact on franchise cash flow in California.”

On the other side of the country, DoorDash is removing tip prompts in New York City and improving its service. fee to all transactions, but still allows customers to add tips after the delivery is complete, depending on the delivery app.

The changes arise in response to a New increase in the minimum wage for food delivery workers through applications. in New York City, who has to be paid at least $17.96 per hour plus tips, or whatever DoorDash called “The extreme and ill-conceived minimum pay rate for food delivery workers in New York City (that) will have significant consequences for everyone who uses our platform.”

The tipping policy change also comes a month after DoorDash told users that customers who do not tip They may have to wait longer for their food deliveries.

“New regulations have changed the way delivery apps like Uber Eats work in New York City,” Uber fixed on a blog, limiting work time options for your messengers.



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