California’s recent implementation of a $20 minimum wage for fast food workers has begun to reveal its impact on both employees and customers across the state. According to Chipotle, one of California’s prominent fast food chains, this law has led to a notable 20% increase in wages for its restaurant staff in the Golden State, as revealed during the company’s earnings call on Wednesday.

To counterbalance this surge in labor costs, Chipotle has adjusted its menu prices upwards by approximately 6% to 7% for customers in California, as stated by CEO Brian Niccol. CFO Jack Hartung further explained that despite the higher cost of doing business in California compared to other regions in the US, the average ticket price in the state wasn’t significantly different before the wage increase.

As Chipotle is headquartered in California and operates 475 restaurants there, which accounts for about one-eighth of its total count, the company has been keenly observing the effects of the new wage law on its operations. Despite the price adjustments, Hartung emphasized that Chipotle remains committed to offering reasonably priced menu items, reassuring customers that popular items like the chicken burrito will still be priced around $10.

However, it’s still early to gauge the full impact of the wage increase on customer behavior. Chipotle is not alone in navigating the financial implications of the new rule, as other restaurant chains are also grappling with similar challenges. Hartung noted that Chipotle is passing on a smaller portion of the increased costs to consumers compared to its competitors, emphasizing the company’s commitment to providing value to its customers.

“We still think we offer a great value here,” Hartung affirmed. “As the consumer figures out how they want to balance their budget, we believe Chipotle will remain within their means.”