New York City Mayor Eric Adams is about to kick off the first annual increase in minimum pay rate for app-based restaurant delivery workers, announced in June 2023. At the same time, in California, fast food workers will be paid $20 an hour as of today, the highest baseline in the State and the whole country after a decade-long fight launched by Governor Gavin Newsom in September 2023. In both states the new minimum wages could hold significant implications for workers nationwide.
New York City is home to more than 60,000 app-based restaurant delivery workers, who are seeing their minimum pay rate going from $17.96/hour to at least $19.56 before tips. They will be making $16.3 million more per week since the first minimum pay rate went into effect in December 2023. That’s an increase of 165 percent. Together with this rule, “third-party food delivery service or third-party courier service must pay, in aggregate, to people who engage in trip or on-call time in a pay period no less than the sum of all such food delivery workers’ trip and on-call time in that pay period multiplied by” the same rates and schedule accordingly. Finally, it includes the City Administrative Code definitions of “Food delivery worker,” “food service establishment,” “third-party courier service,” and “third-party food delivery service.”
“Our delivery workers have consistently delivered for us, 24/7 and during the COVID-19 pandemic, and today we are delivering for them. We are leading the nation in insurance so they can receive a suitable pay they deserve in this process,” NYC Mayor Adams announced.
In California, fast food chains with at least 60 locations nationwide, accounting for 553,000 workers, will set their minimum base salary to at least $20 an hour, making it the highest in the industry–considering the State’s is $16 and the federal is $7.25. Additionally this salary could increase year by year: a nine-member Fast Food Council will control fast food working conditions, deciding to raise the employer minimum wage accordingly each year until 2029.
Arguably, both successful achievements will hold several implications nationwide in the macro industry of restaurants. First, for employers: businesses will hire fewer or even start cutting positions to compensate with the required wage increase. Then, for customers: fast food chains like McDonald’s, Chipotle Mexican Grill and Jack in the Box in California are planning to raise menu prices to keep up with it.
