California’s $20 Minimum Wage Fast Food Bill Gets Even Messier

‘It’s so flawed, you are exempting people and additional industries from the bill’

The fast food bill, California’s new $20 minimum wage law has a “cleanup” bill, Assembly Bill 610, which is supposed to… well… clean up the mess made by Assembly Bill 1228. At least that is what we are supposed to think. But AB 610 opened a new can of worms Monday, adding many new exemptions, and it has some Capitol watchers scratching their heads on the Republican votes.

In late February, the Globe reported that California Governor Gavin Newsom facilitated the exemption for a longtime friend from high school, donor and the billionaire who owns Panera Bread, from California’s new $20 minimum wage law. The exemption was written to the Panera Bread business model: A business operating a bakery and selling bread as a standalone menu item since September 2023, was exempted from AB 1228. Greg Flynn owns more than two dozen Panera Bread locations in California. And in addition of being a high school chum, Flynn contributed at least $164,800 to Newsom’s political campaigns, we learned.

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The Globe and other news outlets received a cheeky email from Newsom’s Deputy Communications Director Alex Stack insisting that all of the media which reported on the preferential treatment of a Newsom donor and old friend was “absurd,” and that “it appears Panera is not exempt from the law.”

It was not a good look for the Governor, who sees himself sitting behind the Resolute Desk one day.

With all of the backtracking and denials, the situation actually looks worse today. While the real scandal is that Gov. Newsom was only too happy to grant a special exemption in a terrible bill for a friend, the governor was perfectly okay with forcing all other fast food businesses in California to pay the exorbitant $20 minimum wage, and bow at the altar of Newsom’s new Fast Food Council.

Making a bad situation and legislation worse, the “cleanup” bill to AB 1228,  Assembly Bill 610 by Assemblyman Chris Holden (D-Los Angeles), was debated on the Assembly floor Monday over numerous additional business exemptions to the fast food $20 minimum wage and new fast Food Council – as if that will make Panera Bread’s exemption a little less sleazy.

Assembly Republican Leader James Gallagher (R-Yuba City) spoke strongly in opposition to the bad policy, and said as the cost of living continues to rise, this bill will make it much worse, and lead to even more job losses.

“It’s so flawed, you are exempting people and additional industries from the bill,” Gallagher said. He asked if the bill is so great, then why are so many exemptions needed?

He also lambasted the gut-and-amended bill, as well as the behind-closed-doors-process it took to pass AB 1228, as well as Gov. Gavin Newsom’s heavy hand on it. Democrat floor leadership shut him down on that line of reply.

Leader Gallagher asked why the bill needed a “clean up,” which often happens after a bad piece of legislation is hastily passed and signed into law – the supposed unintended consequences get rectified and “cleaned up” in new legislation.

So what does AB 610 now propose to exempt?

The bill language says: “This bill would exempt additional restaurants from the definition of “fast food restaurant,” including such restaurants in airports, hotels, event centers, theme parks, museums, and certain other locations.”

What are these locations? Assembly Floor Analysis says:

A “fast food restaurant” shall not include a restaurant that is any of the following:

a) Located in an airport, as defined, but excluding any military base or federally operated facility.

b) Connected to or operated in conjunction with a hotel, as specified.

c) Connected to or operated in conjunction with an event center. “Event center” means a publicly or privately owned structure of more than 20,000 square feet or 1,000 seats that is used for the purposes of public performances, sporting events, business meetings, or similar events, and includes concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers. “Event center” also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event center’s purpose.

d) Connected to or operated in conjunction with a theme park, as specified.

e) Connected to or operated in conjunction with a public or private museum, as defined.

f) Connected to or operated in conjunction with a gambling establishment, as defined.

g) for-profit corporation and its affiliates. ii) Primarily or exclusively serves employees of that corporation or its affiliates.

h) Located on land owned by the state, a city or county, or other political subdivision of the state, that is part of a port district or land managed by a port authority or port commission, a public beach, public pier, state park, municipal or regional park, or historic district, and is operated pursuant to a concession agreement or food service contract.

Think about this – AB 610 will exempt fast food restaurants in airports, hotels, event centers, theme parks, museums, gambling establishments, corporate campus cafeterias, and Publicly owned lands including ports, piers, beaches and parks concessions – not just from the $20 an hour minimum wage starting April 2024, but also from regulation by Gov. Newsom’s creepy new Fast Food Council, which the Globe has reported on as government expansion and control.

So if you own a Taco Bell on Broadway, you don’t get the exemption. But if you own a Taco Bell at the Sacramento International Airport, you’re good to go.

Even more interesting following the debate and indefensible “exemptions,” was the vote.

A number of Republicans abstained from voting.

Click here to read the full article in the California Globe

California Republicans want investigation into Newsom’s ties to Panera franchisee, new fast food law

SACRAMENTO, Calif. —Republican California lawmakers on Thursday called for an investigation into Gov. Gavin Newsom’s ties to a billionaire Panera franchisee and the restaurant’s exemption from a new state law that will require major fast-food chains to pay their workers $20 an hour.

“He owes everybody an explanation,” Republican State Senate Minority Leader Brian Jones said.

Some Republican lawmakers said they had little faith in the ability of California’s Democratic Supermajority Legislature or other top Democrats in state government to investigate the issue. Assemblyman Joe Patterson, R-Rocklin, went as far as to say the FBI should get involved.

“Frankly, I don’t think the California Attorney General is capable of doing that,” Patterson said. “I think it has to be an outside agency that investigates this.”

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Multiple sources who spoke on condition of anonymity have confirmed to KCRA that billionaire franchisee and Newsom donor Greg Flynn influenced Newsom’s push to carve out chains that sell and make bread on-site from the new law in the final weeks of the legislative session in 2022.

Newsom’s office has said that it was the result of two years’ worth of negotiations between him and the Legislature. The law goes into effect in April.

“The Governor never met with Flynn about this bill & this story is absurd. Our legal team has reviewed and it appears Panera is not exempt,” Newsom’s spokesman Alex Stack said on Thursday. Newsom’s office said the exemption applies to those who produce bread on-site, and said some bakeries, including Panera, mix dough off-site at a centralized location before sending it to their restaurants for baking and sale. Experts note that appearance is up for interpretation, and stakeholders for years have understood it as an exemption. The legislation also does not define the word “produce.”

KCRA 3 asked Newsom why the exemption was in there when he signed the law in September of 2023. He said it was “part of the sausage making … part of the negotiations.”

Greg Flynn sent KCRA 3 a lengthy statement on Thursday night:

“It is true that I opposed AB1228, as did thousands of other California restaurant owners. If the intent of the bill was to address alleged labor code violations in fast food restaurants, then the scope of the law should be limited to true fast food restaurants and not include fast casual restaurants like bakeries, bagel shops, delis, etc. I suggested the bill’s language defining “fast food restaurant” should be amended to exclude fast casual restaurants,” Flynn said.

“To be clear, at no time did I ask for an exemption or special considerations. In fact, the idea never even occurred to me and I was surprised when the exemption appeared in the final legislation. Such a narrow exemption has very little practical value. As it applies to all of our peer restaurants in the fast casual segment, we will almost certainly have to offer market value wages in order to attract and retain employees,” Flynn said.

“I also never met with Governor Newsom about this bill, though I did meet with his staff in a group meeting with other restaurant owners. And finally, although we attended the same high school, I never met him there and in fact didn’t meet him until decades later,” he said.

Flynn has not said if he agrees with Newsom’s new interpretation of the law, that it may not exempt Panera.

Democratic Assemblyman Chris Holden, who wrote the law, said he did not know why the exemption was put into the bill. He told reporters on Thursday that despite being the author of the law, he was not part of the negotiation to include the carve-out for bakeries.

“It’s my bill, but in terms of the negotiations, it was bringing together the business community and franchisees and franchisors and through the governor’s leadership, it came together and what came out of that came the amendments of the bill,” Holden said.

Holden said he was not aware of the relationship between Flynn and Newsom.

Click here to read the full article in the California Globe

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