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

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.

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.

But Republican Minority Floor Leader Assemblyman Heath Flora (R-Ripon) voted “Yes” to pass the bill, while Republican Leader Gallagher voted “No” on AB 610. Since when does a Republican floor leader – the number 2 guy – vote against the number 1 guy? And for that matter, why did so many Republicans stay off the vote? It was pretty clear after Leader Gallagher’s floor speech that he would vote “No.”

Perhaps it wasn’t that clear coming from the number 2 guy.