California Pizza Huts, including Sacramento, are opting to lay off drivers instead of paying a $20 minimum wage.

California Pizza Huts, including Sacramento, are opting to lay off drivers instead of paying a  minimum wage.

Pizza Hut franchisees in California are making the decision to lay off over 1,200 delivery drivers in response to a new state law that would require them to pay drivers $20 an hour. This new law is set to go into effect on April 1, 2024. The franchisees, including one that operates restaurants in the Sacramento area, are taking this action rather than comply with the new wage requirement.

According to a report from Business Insider, the layoffs are in response to a federal Worker Adjustment and Retraining Notification Act document filed with the state Employment Development Department. The WARN Act mandates that large employers provide a 60-day notice for planned mass layoffs.

As a result of the layoffs, Pizza Hut customers in California will need to either pick up their orders themselves or utilize third-party, app-based delivery services like GrubHub, Uber Eats, or DoorDash.

The layoffs are being carried out by PacPizza, LLC, based in San Ramon, which operates Pizza Hut locations in Sacramento, Los Angeles, and other cities. Sacramento County food inspection reports indicate that all six Pizza Huts in the county are owned by PacPizza or its subsidiaries, including CalPac Pizza.

The minimum wage increase was signed into law by California Governor Gavin Newsom in September. The new law also establishes a Fast Food Council to oversee wages and workplace conditions in California franchises.

Initially, the fast food industry opposed the legislation and had planned to launch a referendum campaign against it. However, the industry and the state were able to reach an agreement, resulting in the implementation of a $20-an-hour minimum wage and the dropping of the referendum campaign.

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