A California restaurant closed its doors permanently Monday morning just as the state’s new minimum wage law targeting fast food restaurant owners went into effect, putting everyone who worked there out of a job.
Employees at a Fosters Freeze franchise in the city of Lemoore showed up to work on Monday only to find that their boss was handing out final paychecks and that their employment had been terminated.
In total, 20 employees were affected by owner Loren Wright’s sudden decision to close his business.
Wright told KMPH-TV that lawmakers in Sacramento forced his hand.
“I tried to the end to try to figure out a way to make it work. Last thing I ever wanted was to close down,” he told the Visalia-based Fox affiliate.
Wright added he knew he would be forced to close as far back as March 30 but did not tell his crew members because he did not want to spoil Easter for them.
He then criticized the new law that mandates businesses that operate more than 60 locations nationwide must pay unskilled workers $20 per hour.
“Small businesses can’t survive a 120-percent-plus [minimum wage] increase over the last 10 years,” Wright said. “We are all more broke than we were 10 years ago. It’s clear raising [the minimum wage] isn’t helping.”
He thanked his now-former employees and lamented that after 35 years, the Lemoore’s Fosters Freeze location would be gone.
Is a higher minimum wage bad for business?
Monica Navarro, the restaurant’s assistant general manager, told KMPH she was shocked to show up to work on Monday to find Wright at the store with paychecks and a locksmith on-site to shutter the business.
“I was so caught off guard,” she said. “We had no type of notice, no type of warning even. I mean the owner had told me Happy Easter.”
When speaking to Fox Business on Wednesday, Navarro expounded on what she was told by Wright, who she at first thought was playing a prank on her.
“I completely thought it was an April Fool’s joke,” she said.
“He did blame [closing] on the minimum wage increase. Although, from my understanding, I think we were exempt from it because of the amount of locations that he personally owns. But he did ultimately blame it on that increase,” Navarro said.
“I can see their intentions with increasing the minimum wage, thinking that it will attract more people,” she said of the new minimum wage law.
Navarro is a full-time college student who spent three years climbing the management ladder at the location, she said.
Now, she’s back to looking for a paycheck.
“It would have been nice to have a notice,” Navarro added of the way she lost her job.
She concluded, “I honestly don’t think [the minimum wage law] will work. This is not the first business that’s closing. There’s already a few local businesses for me that are closing, so I feel like this is just only the beginning.”
Navarro also predicted tough times for fast food workers as California’s new wage law will undoubtedly put their feet to the fire.
“Please be nice to your fast food workers,” she said in a plea to the public. “They’re going to be getting their hours severely cut running small, small shifts. They’re going to have people yelling at them for the menu increases.”
