CBS News
As new minimum wages are ushered in, companies fight back with fees and layoffs
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.
Chain owner Yum Brands did not immediately respond to a request for comment.
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.
Thanks for reading CBS NEWS.
Create your free account or log in
for more features.
CBS News
FTC sends $2.5 million to Credit Karma customers it says were deceived by “pre-paid” credit offers
Credit Karma customers who were deceived by the credit service’s company’s alleged false “pre-approved” offers will get $2.5 million from the Federal Trade Commission (FTC).
The FTC on Thursday announced that it is sending payments to nearly 51,000 consumers who filed a valid claim with the commission before a March deadline.
It first took action against Credit Karma in 2022, after claiming that around one-third of some customers who were “pre-approved” for credit by the company were in fact denied. The FTC claimed Credit Karma pre-approved customers to entice them to apply for offers that they were unlikely to qualify for. It allegedly used dark patterns — website or app designs that can mislead consumers — to do so.
Credit Karma, which provides users with tools to monitor their credit scores and reports, told some users that they had “90% odds” of being approved for credit products, according to the FTC. Such practices wasted consumers’ time and could have damaged their credit scores, the agency said.
Credit Karma has agreed to an FTC order requiring it to stop making these types of claims, in addition to compensating those harmed by the practice.
“We fundamentally disagree with allegations the FTC makes in their complaint, which relate solely to statements we ceased making years ago. Any implication that Credit Karma rejected consumers applying for credit cards is simply incorrect, as Credit Karma is not a lender and does not make lending decisions,” the company said in a statement to CBS MoneyWatch.
“We reached this agreement to put the matter behind us so we can maintain our focus on helping our members find the financial products that are right for them,” the company said.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
