Small businesses concerned over new $20 minimum wage for California fast food workers
CITRUS HEIGHTS -- The wait is over and California fast food restaurants with 60 or more locations will pay workers at least 25% more than the state's $16 minimum wage.
With the change comes concerns from small businesses, like California Burgers in Citrus Heights. The Sacramento County staple has been in business on Auburn Boulevard for 30 years, but 2024 has brought on new challenges for Co-Owner and Manager Theodore Linardos.
His family has owned the restaurant that's made a name for fresh food at fast-food prices for decades. The challenge now, he told CBS13, is competition with fast food chain competitors that are now required to pay their workers at least $20 an hour.
"We already have a problem retaining employees as it is for this line of work. Now it's going to be more difficult. Someone can go to a McDonald's and get paid 20 an hour," Linardos said.
He said California Burgers runs on a "bare bones staff" and the owners do step in to do what jobs are necessary because hiring and retaining employees has become a recent challenge.
"We're just trying to make do just to get past this tough year," Linardos said.
The small business doesn't rely on frozen food and the menu is built on fresh ingredients, including fresh beef for burgers that are cooked up daily. This, Linardos said, presents a challenge: it's not a simple fix to increase wages for employees, or, he says, they risk losing customers, too.
"Our margins are already pretty tight. It's not like we can raise prices. Everyone always feels like we're tight on funds, which I understand," Linardos said "Can't really do that. You're pricing people out."
California Burgers is not the only small business looking ahead at the impacts of the new fast food bill.
"Real-world impacts are already being seen across the business model in California. Businesses are potentially looking at reducing hours, laying off employees," said Jeff Hanscom, the vice president of the International Franchise Association.
Linardos said he hopes neighbors will consider a family-owned business, like California Burgers, when they eat out to support local businesses through the tough times.
California's mandatory minimum wage for fast-food workers jumped from $16 an hour to $20 an hour on April 1 after Governor Gavin Newsom signed the Fast Act back in September requiring fast-food chains with 60 or more locations nationwide to bump up their pay.