Most fast food workers in California are set to be paid at least $20 an hour beginning this week as a new law has been put into effect.
The law, passed by Democrats in the state Legislature last year, is part of an effort to support adults working in the fast food industry.
Many franchise owners in the state have stressed the impact the law is having on them, especially during a time of record high inflation.
“I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard,” Alex Johnson, owner of 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area, said.
Johnson said sales have slowed in 2024, forcing him to lay off his office staff and rely on his parents to help with payroll and human resources.
Increasing his employees’ wages will cost the franchise owner about $470,000 each year, causing him to raise prices anywhere from 5% to 15% at his stores.
“I have to consider selling and even closing my business,” he said. “The profit margin has become too slim when you factor in all the other expenses that are also going up.”
According to AP News, “the law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide. Restaurants operating inside a grocery establishment are exempt, as are restaurants producing and selling bread as a stand-alone menu item.”