$20 minimum wage goes into effect for California fast food workers

LOS ANGELES - Beginning April 1, most fast food workers in California will be paid a $20 minimum wage - a nearly $5 per hour raise — under a deal made last year between labor unions and the industry that helped avoid a costly referendum on the November 2024 ballot.

The mandatory raise applies to all fast food restaurants in California that are part of a chain with at least 60 locations nationwide. It does not apply to restaurants that operate a bakery and sell bread as a stand-alone menu item, such as Panera Bread. 

When it takes effect, fast food workers in California will have among the highest minimum wages in the country, according to data compiled by the University of California-Berkeley Center for Labor Research and Education. The state’s minimum wage for all other workers — $15.50 per hour — is already among the highest in the United States.

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The agreement ended a tense standoff between labor unions and the fast food industry that started in 2022 when Democratic Gov. Gavin Newsom signed a law creating a Fast Food Council with the authority to raise wages of fast food workers up to $22 per hour. California’s current minimum wage for all industries in the state is $15.50 per hour.

The $20 hourly wage would be a starting point. The nine-member Fast Food Council, which would include representatives from the restaurant industry and labor, would have the power to increase that minimum wage each year by up to 3.5% or the change in the U.S. consumer price index for urban wage earners and clerical workers, whichever is lower.

However, not everyone is happy about this minimum wage increase law.

Several eateries, particularly pizza chains, have begun to cut jobs, in an effort to get ahead of the possible financial repercussions, The Wall Street Journal reported. 

Michael Ojeda, 29, a Pizza Hut driver in Ontario, Calif., told the newspaper that he received a notice from Pizza Hut franchisee Southern California Pizza in December informing him that his last day of work would be in February.

"Pizza Hut was my career for nearly a decade and with little to no notice it was taken away," said Ojeda.

Last year, multiple Pizza Hut franchises in California filed notices to comply with the Worker Adjustment and Retraining Notification Act, saying they were discontinuing their delivery services. Many of the services were delivery driver jobs. 

Several major fast-food franchises, including McDonald’s and Chipotle, have already signaled that prices will have to rise in response to the increased labor costs.

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California’s fast food workers earn an average of $16.60 per hour, or just over $34,000 per year, according to the U.S. Bureau of Labor Statistics. That’s below the California Poverty Measure for a family of four, a statistic calculated by the Public Policy Institute of California and the Stanford Center on Poverty and Equality that accounts for housing costs and publicly-funded benefits.

The Associated Press and FOX News contributed to this report.