Pizza Hut franchises in California laying off 2,000 drivers in 2024

At least 2,000 Pizza Hut workers in Southern California are facing layoffs next year when a new law increasing the fast-food minimum wage in California goes into effect in April.

A company franchise is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour.

The law, known as Assembly Bill 1228, was introduced by Assemblyman Chris Holden, D-Pasadena, and signed into law in September by Gov. Gavin Newsom.

Business Insider reported Tuesday that the layoffs are planned through the end of February, ahead of the pay increase slated to begin in April.

Pac Pizza LLC, Insider reported, filed a Worker Adjustment and Retraining Notification Act notice with the state’s Employment Development Department writing that it will follow through with its decision to eliminate first-party delivery services.

The WARN Act requires employers to give notice of mass layoffs or plant closures.

A second Pizza Hut franchise, Southern California Pizza Co., also is planning to lay off 841 drivers. The layoffs will affect drivers in Pizza Hut locations in Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon, the Reno-Tahoe area, among others.

Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries.

Yum! Brands, which owns Pizza Hut and other fast food companies such as Taco Bell and KFC, did not immediately respond to a request for comment.

Yum previously told Business Insider that “its franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations while continuing to provide quality service and food to our customers via carry out and delivery.”

It was previously reported that other food chains such as Chipotle and McDonald’s said they planned to raise menu prices as a way to offset the costs of higher wages in California.

Following the law’s passing, Holden in a statement said the pay increase will help workers feed their children, keep gas in their vehicles, and improve the quality of life of many.

In addition to raising the minimum wage for fast food workers to $20 an hour, it will also establish a Fast Food Council. The council would work to resolve employer community concerns while preserving fast food jobs by securing a seat at the table to raise standards, according to Holden’s office.

The council will consist of nine voting members including representatives of the fast food industry, franchisees, employees, advocates, one unaffiliated member of the public and two non-voting members.

Responsibilities of the council will also include development of fast food worker standards, covering wages, working conditions and training.

AB 1228 will affect more than 550,000 fast food workers and about 30,000 restaurants in the state.


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