California's new law boosting the minimum wage for fast-food workers in the state to $20 an hour went into effect Monday, impacting restaurants that have at least 60 locations nationwide, except those that make and sell their own bread.
Gov. Gavin Newsom signed the legislation, AB 1228, into law in September. In addition to the pay raises, it also establishes a "Fast Food Council," including representatives for both workers and employers, that can approve further pay increases and set standards for working conditions.
The overall minimum wage for other workers in California is $15.50 an hour, among the highest of any state. The federal minimum wage, which has remained unchanged since 2009, is $7.25 an hour, or $15,080 a year for an employee working 40 hours a week.
CALIFORNIA FOOD CHAINS LAYING OFF WORKERS AHEAD OF NEW MINIMUM WAGE LAW
The median fast-food worker in the U.S. earned $13.43 an hour in 2022, while those in California made an average of $16.60 an hour, according to the Bureau of Labor Statistics. The new minimum equates to an annual salary of $41,600.
Workers and labor unions have celebrated the new law as progress for workers' rights, with supporters arguing many workers in fast-food restaurants are not teenagers working their first job, an image being portrayed by opponents.
But restaurant owners have warned the increased pay will lead to job cuts and higher prices for consumers. Multiple California food chains, including Pizza Hut, Southern California Pizza, Round Table Pizza and Vitality Bowls, announced layoffs following the law's passage.
"Restaurants are struggling to stay above water, and Democrats just threw them an anvil," California Assembly Republican leader James Gallagher told FOX Business. "We warned Democrats this new mandate would cost jobs. They ignored us, and here we are with the highest unemployment rate in the country poised to get even worse."
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FOX Business' Louis Casiano and Reuters contributed to this report.
