Fast food restaurants in California will be forced to increase their menu prices after Democratic lawmakers implemented newly increased minimum wages.

California Democratic Governor Gavin Newsom signed legislation last month which increased fast food minimum wages to $20 per hour starting in April of next year, as well as heightened working condition regulations and health standards. The law also establishes a Fast Food Council with authority to create additional rules for the fast food industry.

“California is home to more than 500,000 fast-food workers who for decades have been fighting for higher wages and better working conditions,” Newsom said in a statement. ‘Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

Executives for fast food companies nevertheless revealed in recent third-quarter earnings calls that the new regulations would impact consumer prices. McDonald’s CEO Chris Kempczinski confirmed to reporters that there would be a “wage impact for our California franchisees.”

“I don't think at this point we can say exactly how much of that is going to work its way through pricing,” Kempczinski remarked. “Certainly there's going to be some element of that which does need to be worked through with higher pricing. There's also going to be things that I know the franchisees and our teams there are going to be looking at around productivity. How all of that plays out, there will certainly be a hit in the short-term to franchisee cash flow in California.”

Chipotle CFO Jack Hartung likewise told reporters that the California law would cause a “pretty significant increase” to labor costs. “We haven't made a decision on exactly what level of pricing we're going to take. But to take care of the dollar cost of that and the margin, part of that we haven't decided yet where we will land,” he said. “We are definitely going to pass this on. We just haven't made a final decision as to what level yet.”

Many have noted that increasing minimum wages can produce distortions in labor markets and increase price pressures on consumers: one survey of labor economists conducted by the Employment Policies Institute found that roughly 83% opposed the California minimum wage law, while strong majorities agreed that the law would raise operating costs for restaurants, produce higher food prices for customers, and cause the eventual closure of franchises.