Current:Home > InvestAs new minimum wages are ushered in, companies fight back with fees and layoffs -MacroWatch
As new minimum wages are ushered in, companies fight back with fees and layoffs
View
Date:2025-04-14 17:01:16
An estimated 10 million low-wage earners are getting a raise in the new year, but not all employers are taking higher minimum wages across 22 states in stride.
Pizza Hut is laying off more than 1,200 delivery drivers in California ahead of the state's nearly 30% increase in its minimum wage, to $20 an hour from $16. PacPizza, operating as Pizza Hut, and Southern California Pizza Co. — another Pizza Hut franchise, both gave notice of layoffs impacting workers in cities throughout the state, Business Insider reported, citing notices filed with the state.
At least one Pizza Hut franchisee also charges a service fee, citing the increased cost of operating in California in its tacking on an 8.5% service charge to the bill, according to the Los Angeles Times.
"Pizza Hut is aware of the recent changes to delivery services at certain franchise restaurants in California. Our franchisees independently own and operate their restaurants," a Pizza Hut spokesperson told CBS MoneyWatch in an emailed statement. "Where franchisees have elected to make changes to their staffing approach, access to delivery service will continue to be available via Pizza Hut's mobile app, website and phone ordering," the spokesperson added.
Fast-food chains including McDonald's have already said menu prices would rise in the state to counter the higher labor costs.
The Golden Arches in November said its menu prices rose just over 10% nationwide this year, with CEO Chris Kempczinski telling analysts in an earnings call that "there will certainly be a hit in the short-term to franchisee cash flow in California."
On the other side of the country, DoorDash is getting rid of tipping prompts in New York City and upping its service fee to all transactions, but is still letting customers add gratuity once the delivery is finished, the delivery app said.
The changes come in response to a new minimum wage hike for app-based food delivery workers in New York City, who must be paid at least $17.96 an hour plus tips, or what DoorDash called "the ill-conceived, extreme minimum pay rate for food delivery workers in New York City [that] will have significant consequences for everyone who uses our platform."
The switch in tipping policy also comes a month after DoorDash told users that customers who don't tip may have to wait longer for their food deliveries.
"New regulations have changed how delivery apps like Uber Eats work in New York City," Uber stated in a blog, limiting work-time options for its couriers.
Kate GibsonKate Gibson is a reporter for CBS MoneyWatch in New York.
veryGood! (348)
Related
- Meta releases AI model to enhance Metaverse experience
- A 4th person has died after fiery crash near western New York concert, but motive remains a mystery
- Italy’s justice minister nixes extradition of priest sought by Argentina in murder-torture cases
- Josh Groban never gave up his dream of playing 'Sweeney Todd'
- Apple iOS 18.2: What to know about top features, including Genmoji, AI updates
- Mary Lou Retton's health insurance explanation sparks some mental gymnastics
- Belarusian journalist goes on trial for covering protests, faces up to 6 years in prison
- The FAA is tightening oversight of Boeing and will audit production of the 737 Max 9
- Who are the most valuable sports franchises? Forbes releases new list of top 50 teams
- Mass shooting at Buffalo supermarket now Justice Department’s first death penalty case under Garland
Ranking
- Taylor Swift makes surprise visit to Kansas City children’s hospital
- Family sues school district over law that bans transgender volleyball player from girls’ sports
- Police in Puerto Rico capture a rhesus macaque monkey chased by a crowd at a public housing complex
- Producers Guild nominations boost Oscar contenders: 'Barbie,' 'Oppenheimer' and more
- Nearly half of US teens are online ‘constantly,’ Pew report finds
- The Australian Open and what to know: Earlier start. Netflix curse? Osaka’s back. Nadal’s not
- Tragedy unravels idyllic suburban life in 'Mothers' Instinct' trailer with Anne Hathaway, Jessica Chastain
- Former US Sen. Herb Kohl remembered for his love of Wisconsin, Milwaukee Bucks
Recommendation
Federal appeals court upholds $14.25 million fine against Exxon for pollution in Texas
Crash between school bus, coal truck sends 20 children to hospital
Outage map: thousands left without power as winter storm batters Chicago area
Democratic lawmakers in New Mexico take aim at gun violence, panhandling, retail crime and hazing
The FTC says 'gamified' online job scams by WhatsApp and text on the rise. What to know.
Usher Super Bowl halftime show trailer promises performance '30 years in the making': Watch
As Vermont grapples with spike in overdose deaths, House approves safe injection sites
Alabama court says state can make second attempt to execute inmate whose lethal injection failed