As new minimum wages are ushered in, companies fight back with fees and layoffs

Pizza Hut Layoffs

Amidst a significant increase in the minimum wage in California, Pizza Hut is planning to lay off over 1,200 delivery drivers as it faces the state’s upcoming nearly 30% rise in its minimum wage, climbing from $16 to $20 an hour.

According to Business Insider, notices filed with the state indicate that the layoffs will affect workers in various California cities. In response to the increased cost of operating in California, at least one Pizza Hut franchisee plans to add an 8.5% service charge to bills to cover the expenses.

Yum Brands, the owner of Pizza Hut, has not issued a public comment regarding the layoffs. Similarly, other fast-food chains, such as McDonald’s, are anticipating menu price increases to counter the heightened labor costs. CEO Chris Kempczinski noted that prices rose just over 10% nationwide.

In New York City, DoorDash is also adjusting its policies in response to a new minimum wage hike for app-based food delivery workers. The company is eliminating tipping prompts and increasing its service fee. However, customers can still add gratuity after the delivery is completed. Uber Eats has also stated that regulations have shifted work-time options for its couriers due to changes in New York City’s delivery app operations.