California’s $20 Fast Food Minimum Wage Law Goes Into Effect

California’s AB 1228 $20 fast food minimum wage law went into effect on Monday, raising the wages of fast food workers state-wide amidst fast food restaurant owners firing workers, cutting back hours, and raising prices in order to stay in business.

Following the signing of AB 1228 in October by Governor Gavin Newsom, the new $20 minimum wage for fast food employees, a massive jump from the $16 minimum wage, has had multiple companies take extreme measures. Some, like Chipotle and McDonalds, have announced already raised prices before the wage raise date of April 1st. Others are investing in automated kiosks and other automated devices to help reduce the number of employees. Some stores outright closed.

Most notable, however, has been the massive amount of layoffs. Already, over 1,200 Pizza Hut drivers have had announced lay-offs, to be replaced by services such as DoorDash and Uber Eats in the coming months. Roundtable Pizza has also done the same with many of their delivery drivers, with many other chains currently also looking into doing the same for deliveries. Seeing signs of massive layoffs ahead, many workers have even transitioned out to other lines of work in anticipation.

In recent weeks it has got even messier. Panera Bread, which was originally exempt over having in-store bakeries and selling bread as a stand-alone, voluntarily went to the $20 wage following accusations that Governor Gavin Newsom had allowed the exception to take place to benefit a major donor. AB 1228 bill author, Assemblyman Chris Holden (D-Pasadena), recently also created a new bill to grant numerous exemptions in an attempt to lighten the economic blow of AB 1228, including to fast food restaurants in airports, stadiums, casinos, events and corporate campuses. However, as the Globe noted, AB 610 does anything but cleanup the mess caused by AB 1228.

After a final push of major layoffs, price raises and employee hours being cut, the heavily altered AB 1228 went into effect on Monday. However, reaction to the law going into effect had almost complete silence from supporters of the new law. Holden’s office, everywhere from social media to his personal Assembly page, did not release anything on Monday. The same radio silence came from Governor Newsom, as his multiple social media accounts, his press release section of his website, and his office’s social media had nothing on it. On the official Governor Twitter page, the last story was from Sunday about the highway collapse outside of Big Sur. While this time of no messages only covers the morning, insiders noted that the major lawmakers of a huge bill not sharing how it went into effect early that day is quite unusual.

“They usually have a press release the night before or early in the morning,” said Dana, a staffer in the state Capitol on Monday. “Big bills always have that press release going out, along with well crafted quotes from the bill author, bill co-sponsors, supporters, and if they can get him, the Governor. Lesser bills, or if they have many coming into effect, they can stretch out. Like all bills coming into effect on January 1st each year, they’ll usually have the stories trickle out from late December into mid-January. But here? April 1st, with nothing else going on? They should be all over this.”

“They might not want to have it come out on April 1st because they fear that everyone will call it a joke, but they should have thought about that when they wrote the bill. But no. Now, we could see them tweet something out later today or put out a big press release. But instead there was just the AP and other news outlets reporting with older quotes, and opponents getting in fresh quotes and putting out major press releases on Monday. It’s like the supporters saw the trouble ahead, like with how they passed AB 610 beforehand. No one wants to be known as the person who cost employees jobs or hours or other things like that.”

As of Monday morning, only a few fringe groups and unions, like SEIU California and Fight for 15, have mentioned the new law going into effect.

Today more than half a million #fastfood workers, most of whom are women and workers of color, will see their pay go up to $20/hr. This is a crucial step toward addressing ongoing crises of racial and economic inequality. Sí se puede! https://t.co/trxtnbP8iz

— SEIU California (@seiucalifornia) April 1, 2024

Meanwhile, opposition groups and lawmakers blasted the new law on Monday, bringing attention to the multiple negatives of the new law on a day where supporters had expected it to be celebrated.

“Restaurants are struggling to stay above water, and Democrats just threw them an anvil,” said Assembly Republican Leader James Gallagher (R-Yuba City) in a FOX Business interview. “We warned Democrats this new mandate would cost jobs. They ignored us, and here we are with the highest unemployment rate in the country poised to get even worse.”

In a statement, the California Alliance of Family Owned Businesses also added that “California lawmakers have singled out family-owned fast food franchise operators to target with wage and regulatory requirements not imposed upon other businesses. As family-owned businesses, we are proud to provide jobs and opportunities for our valued employees but we also want an even playing field. The minimum wage for one should be the same for all.”

While law now, many have said that further changes to the bill are likely, especially if more fast food restaurants across the state continue to falter.

“Oh, we begin to see more and more owners struggle, or if food costs continue to rise, or if inflation goes up more, we may be seeing more exemptions,” continued Dana. “Maybe from this one, but certainly from any future wage increase. I know it’s an easy joke, but I’ll say it anyway. Today is April Fool’s day and this bill became law today. But that $20 minimum wage for fast food employees isn’t a joke.”

Early effects of AB 1228 are expected to be reported on in the coming months as restaurants begin to post first monthly totals.