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California passes more exemptions to state minimum wage law after Panera outrage

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(The Center Square) – California passed a number of exemptions to the state’s new fast-food minimum wage law that was slammed for providing a carve-out specifically for Panera. The revised bill, which includes exemptions for airports, hotels, large event centers, theme parks, museums, gambling establishments, corporate campuses, and certain public lands, goes to the governor’s desk for his signature.

Under the state’s new fast-food minimum wage law, those working for national chain restaurants with 60 or more locations and do not offer full service are entitled to wages of $20 per hour beginning on April 1, 2024. The law also allows a new Fast Food Council to establish working conditions and minimum wages that would rise each year by the lesser of 3.5% or the past year’s inflation recorded in the Consumer Price Index. The council will be able to make decisions on “conditions” regarding employees’ health, safety and security, and their right to take time off.

The original law first exempted only fast-food locations that bake and sell bread on premises as a standalone item, a category that only applied to Panera.

This exemption drew national outrage after Bloomberg reported billionaire Greg Flynn, the largest franchise owner in the United States, second-largest Panera operator in the world and a classmate and major donor of the governor’s used his influence to secure a Panera carve-out.

The main groups supporting these exemptions are the largest unions in the state – the Service Employees International Union, the largest union in the state, and Unite Here!, which represents members in the hospitality industry employed in hotels, restaurants, airports, sports arenas and convention centers.

SEIU is the largest donor on record for Assemblymember Chris Holden, D-Pasadena, who authored both the $20 minimum wage bill and AB 610, the bill headed to the governor’s desk with the new exemptions.

While major unions may seem odd bedfellows for a law designed to create exemptions for a minimum wage law supported by unions, reporting from Ashley Zavala at KCRA offers some reasons why this bill is happening. Sources stated the SEIU required non-disclosure agreements in the final negotiations of the fast-food wage law and kept other labor groups such as Unite Here! out of the final negotiations.

Under the new wage and labor law, labor groups felt their bargaining power would be reduced in the areas where they are trying to secure their exemptions — such as Unite Here!, which works in events and hospitality spaces — allegedly leading Holden to promise a quick bill exempting their areas of organizing from the new wage and labor law.

AB 610 easily passed amid Republican opposition. By uncovering the use of NDAs in legislation, this episode spurred Republican Assemblymember Vince Fong, R-Bakersfield, to introduce a bill banning NDA use in legislative negotiations. Under his bill, use of NDAs would invalidate any state legislation created involving the agreements.

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