When California Governor Gavin Newsom signed AB 1228 last September, raising the federal minimum wage for fast-food workers from $15.50 to $20 an hour, the fast-food industry was left with many questions before the law officially went into effect on April 1.

To answer some of these questions, the California Department of Labor Relations created a FAQ board. The information provided ranged from general topics like what constitutes a “fast food” restaurant under the new law (the state defines it as a “limited service restaurant” that sells food or beverages for immediate consumption and has over 60 locations nationwide) to lesser-known topics like whether employers could simply increase the meal or lodging credits given to their employees to count toward the minimum wage (no).

However, one of the biggest questions facing fast food employers remained unanswered: How should they actually pay their employees under the new law?

While the decision was welcomed by many union activists as part of a broader effort to improve working conditions and eliminate wage disparities, some California franchisees began preemptively cutting their employees’ working hours in advance of the minimum wage increase.

For example, two days after the law went into effect, Business Insider reported that two Pizza Hut franchisees in the state said they “wanted to abandon in-house delivery” and rely on outside services instead, leading to the layoff of about 1,200 employees. A few days earlier, in March, Alex Johnson, who owned 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area, laid off his office staff and told the Associated Press that he would now rely on his parents for payroll and benefits.

“I try to do the right thing for my employees,” Johnson told the publication at the time. “I pay them as much as I can, but this law really hits our business hard.”

Many economists and franchisees predicted that AB 1228 would crash the fast-food industry in California. Yet, according to new state and federal employment data, California’s fast-food industry has actually added new jobs every month this year — including 11,000 new jobs since the wage increase officially went into effect in April. In a press release, Newsom’s office reported that there has been a steady increase in fast-food employment every month since the wage increase this year, and that nearly every month had more jobs than the same month last year.

“What’s good for workers is good for business, and as California’s fast-food industry continues to boom each month, our workers are finally getting the pay they deserve,” Newsom said in a written statement. “Despite the lies that would doom the industry, California’s economy and workers are once again proving them wrong.”

That’s not exactly unexpected. Michael Reich, an economics professor at the University of California-Berkeley, said history has not borne out many doomsday predictions about the future of fast food in California.

“The downside is that a minimum wage increase would lead to business closures, layoffs and significantly higher prices,” Reich told Public News Service. “That has been the downside of every minimum wage increase since 1938. In fact, numerous studies have found that minimum wages do not reduce employment in the fast-food sector.”

But despite the positive job growth, the effects of AB 1228 have also proven complicated. As expected, higher wages have led to an increase in menu prices at fast-food chains, with many companies passing the costs on to consumers.

This summer, the nonprofit Employment Policies Institute surveyed the owners or managers of 182 limited-service restaurants in California. 98 percent said they had already raised menu prices. 93 percent expect they will have to raise menu prices again next year to account for rising costs. Relatedly, 92 percent of owners think “increasing menu prices will negatively impact customer traffic.”

It’s important to note that this phenomenon isn’t unique to California. Fast-food giants across the country have adjusted their pricing strategies to keep up with rising labor costs, leading to what some are calling the “War of Value Meals.” Companies are competing fiercely to offer the cheapest meals while maintaining profitability while attracting price-conscious customers.

On the other hand, the higher wages have had an unexpected benefit: lower employee turnover. With a wage of $20 an hour, fast-food jobs in California have become more attractive to more qualified applicants, which has reportedly led to a more stable and skilled workforce.

Joseph Bryant, the deputy executive director of the Service Employees International Union – which was a key supporter of AB 1228 – recently told NBC Bay Area that not only has the industry created jobs, but “several franchisees have found that the higher pay is already attracting better applicants, thus reducing turnover.

This stability could allow some franchises to streamline their operations and improve service quality, potentially offsetting some of the increased costs. However, the pressure on franchises remains enormous as they must walk the fine line between remaining competitive and managing new operating costs.