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California is set to raise its minimum wage for fast food workers to $20 per hour starting in April.
Ahead of this, some restaurants are laying off employees, halting hiring, or cutting hours, according to state records and the Wall Street Journal.
While supporters say it will help workers, others argue margins are small in the restaurant industry.
California already saw a 1.3% decline in fast food jobs from when the wage hike was approved.
Studies of previous minimum wage increases found they cost low-skilled workers in Seattle $1,500 annually on average after cut hours.
Restaurant businesses are often hardest hit by municipal wage hikes.
California currently has the highest unemployment rate in the US at 5.3%, raising economic concerns about the impact of the wage increase.
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