LABOR
California pizza delivery drivers first to feel the effect of the $20 minimum wage
More than 1,200 delivery drivers have been fired in the state, made easier by legislation passed in 2020 which classes them as self-employed.
The increase in the state minimum wage in California has already begun to cause the first havoc among food delivery workers. The increase from $16 to $20 per hour worked has coincided with the layoffs of nearly 1,200 workers at PacPizza and Southern California Pizza Company, two franchises within the Pizza Hut structure.
“PacPizza, LLC, which operates as Pizza Hut, has made the business decision to eliminate its own delivery services and, as a result, the elimination of all delivery driver positions,” read the official statement.
The workers can be let go without any problems because of Prop 22.
Proposition 22, passed in 2020, allowed delivery and ride hail companies to classify their drivers as independent contractors rather than employees, exempting them from certain labor laws and benefits that typically apply to employees, such as minimum wage, overtime pay, and reimbursement for work-related expenses. Those let go will have no recourse as technicly they are self-employed.
The layoffs will begin this month of February, that is, two months before the wage reform becomes effective in the state of California.
Earlier this year, California’s legislature passed a new law that requires fast-food companies to pay their workers a minimum of $20 per hour. According to the Bureau of Labor Statistics, there were approximately 540,000 fast-food workers in California who earned an average hourly wage of just above $16 in May of 2022.
What about other restaurants?
Chipotle and Panda Express told Nation’s Restaurant News that there are no plans for layoffs. Chipotle also said they plan to increase staff hires in response to 315 restaurant openings across the country.