Countdown to California's new fast-food wage is triggering some strangeness

Working Lunch: Why the sudden controversy over some provisions, and the backtracking by the new law's sponsor?

With California’s new fast-food wage law slated to take effect in less than a month, the full import is starting to sink in for supporters and detractors alike, as this week’s Working Lunch podcast attests.

Why, for instance, is there suddenly an outcry over what’s known as the Panera exemption? From the time the bill was written, cafe concepts selling whole breads for take-home consumption on a specific date were exempted from having to pay workers at least $20 an hour as of April 1, as units of all other large quick-service chains are obliged to do.

At the time the bill was passed, the carve-out was there in black-and-white, a result of what insiders say was a personal connection between California Gov. Gavin Newsom, the bill’s godfather, and Panera Bread franchisee Greg Flynn, a former classmate and longtime friend of the governor.

Both parties deny any favoritism, without providing an alternate explanation of why the exemption was included. Asked about it at the time the bill was signed, Newsom dismissed the carve-out as “sausage making,” and quickly moved on to the next question from the media.

Working Lunch co-hosts Joe Kefauver and Franklin Coley suggested in opening this week’s broadcast that the provision came to light because Newsom is drawing more scrutiny as he emerges as an avid supporter of President Joe Biden’s re-election. The larger political world is just discovering the controversial exception.

Similarly, the focus has been on the creation of a state-level Fast Food Council, a group empowered to set the wages for California units of large fast-food chains. A little-trumpeted provision of the act, AB 1228, specifies that municipalities with at least 50,000 residents can set up a local version of the council.

That right is being exercised by San Jose, and “we expect something in LA as well,” said Jot Condie, CEO of the California Restaurant Association and the guest of Kefauver and Coley on this week’s Working Lunch.

Condie also addressed the strange development of 1228’s author introducing a follow-up measure to exempt additional types of fast-food restaurants from his own bill. Under the new proposal from Assemblyman Chris Holden, quick-service outlets in many types of non-conventional locations, from casinos to the campus-like headquarters of Silicon Valley tech companies, would not have to pay $20 an hour as of April 1.

It may not be a coincidence, said Condie, that those types of fast-food places tend to be represented by unions other than the Service Employees International Union, or SEIU, the labor group that successfully pushed for formation of the Fast Food Council. He aired the theory that those other unions didn’t like SEIU encroaching on their territory, especially when they may have already hammered out a collective bargaining agreement.

After 1228 was signed into law, SEIU officials hailed passage as the most important victory for organized labor in 50 years.

Yet to be seen is which union will be represented on the Fast Food Council, whose nine members have yet to be named. Yet, Condie noted, AB 1228 requires that the Council hold its first meeting by March 22.

For a full download on the wrangling that’s underway in California, and will likely intensify through April 1, press “Play” on this week’s Working Lunch.

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