LOS ANGELES (NEWSnet/AP) — Lawrence Cheng, whose family owns seven Wendy’s locations south of Los Angeles, used to have a dozen employees on the afternoon shift. Now, he schedules only seven.

He’s scrambling to absorb a dramatic jump in labor cost after a California law raised the hourly wage for fast food workers on April 1 from $16 to $20 per hour.

“We kind of just cut where we can,” he said. “I schedule one less person, and then I come in for that time that I didn’t schedule and I work that hour.”

Experts say it’s still too soon to predict long-term impact of the wage hike on fast food restaurants and whether there will be layoffs or closures. In the first two months after the law’s passage, the industry gained 8,000 jobs, compared to the same period in 2023, according to U.S. Bureau of Labor Statistics.

Joseph Bryant, executive vice president of Service Employees International Union, said the industry has added jobs under the new law, and also multiple franchisees have noted the higher wage is attracting better job candidates, reducing turnover.

But some major chain operators say they are cutting hours and raising prices to stay in business.

“I’ve been in the business for 25 years and two different brands and I never had to increase the amount of pricing that I did this past time in April,” said Juancarlos Chacon, owner of nine Jersey Mike’s in Los Angeles. Since the core time frame is lunch, Chacon has reduced staffing for mornings and evenings. He also cut a few part-time employees, going from 165 to about 145.

Cheng said he has cut overtime and reduced the number of workers on each shift. He also raised menu prices about 8% in January in anticipation of the law. He said his books show he was $20,000 over budget for a two-week pay period.

For Enif Somilleda, a general manager at a Del Taco in Orange County, the raise has been a mixed bag. She used to have four people working per shift. She now only has two.

“Financially, it has helped me,” she said. “But I have less people, so I have to do a lot more work.”

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