Los Angeles
CNN
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The minimal wage for quick meals staff in California is set to increase to $20 per hour on April 1, however one curious carve-out within the new minimal wage legislation has ignited controversy within the state. And Panera Bread has been caught within the center.
The legislation exempts companies that produce and promote bread as a stand-alone menu merchandise, that means these bakeries are usually not required to pay staff the upper minimal wage and might proceed paying the state’s present $16 minimal wage. That’s confounding some within the restaurant trade.
Democratic California Gov. Gavin Newsom has confronted accusations – notably from Republican lawmakers and conservative media – that Panera might have obtained this unlikely and particular exemption due to Newsom’s ties to Greg Flynn, a billionaire Panera franchise proprietor who’s a former classmate of Newsom’s. He has donated to the governor’s campaigns prior to now.
Each Newsom and Flynn have denied Flynn’s affect over the invoice. Newsom has additionally mentioned that Panera is probably not exempt from the brand new minimal wage legislation in spite of everything. Panera didn’t reply to CNN’s requests for remark.
Nonetheless, on Thursday, Republican lawmakers in California known as on the state’s lawyer normal to analyze the minimal wage exemption.
“Marketing campaign contributions shouldn’t purchase you exemptions in laws,” mentioned California Senate minority chief Brian Jones in an announcement. “The general public deserves to know the reality in regards to the allegations of Governor Newsom’s crony capitalism.”
Right here’s what it is advisable to know in regards to the controversy:
Based on California public records, Flynn, whose firm, The Flynn Group, has 24 Panera areas in California, donated a number of occasions to Newsom’s 2022 re-election marketing campaign and gave $100,000 in 2021 amid a conservative struggle to recall the governor.
Nonetheless, Flynn mentioned he by no means personally met with Newsom in regards to the minimal wage invoice, although he did meet with Newsom’s workers and a gaggle of different restaurant homeowners to debate it.
In an announcement to CNN, Flynn mentioned he and hundreds of different California restaurant homeowners disliked an preliminary model of the invoice as a result of “if the intent of the invoice was to deal with alleged labor code violations in quick meals eating places, then the scope of the legislation needs to be restricted to true quick meals eating places and never embody quick informal eating places like bakeries, bagel retailers, delis, and so forth.”
“I recommended the invoice’s language defining ‘quick meals restaurant’ needs to be amended to exclude quick informal eating places,” Flynn mentioned.
Nonetheless, Flynn mentioned he by no means requested for an exemption or particular concerns and mentioned he was “stunned” when the bakery exemption appeared within the remaining laws.
Flynn additionally clarified that though he attended the identical highschool as Newsom, the 2 didn’t meet till a long time later.
Flynn’s firm operates extra than simply Panera Bread areas. The Flynn Group owns 2,600 franchise areas together with Applebee’s, Taco Bell and Arby’s companies.
These manufacturers can be required to pay a minimal wage of $20 below the brand new legislation – and Flynn argued that his Panera Bread areas would doubtless have to lift worker pay even when they got a break from the legislation.
“Because it applies to all of our peer eating places within the quick informal section, we are going to virtually definitely have to supply market worth wages with the intention to appeal to and retain workers,” he mentioned.
Alex Stack, a spokesperson for Newsom, known as the story about Flynn’s supposed connection to the bakery carve-out “absurd,” reiterating that the governor by no means met with Flynn in regards to the invoice.
Stack additionally mentioned that Newsom’s authorized workforce decided that the carve-out would doubtless not apply to most Panera Bread areas.
“We perceive many chain bakeries (reminiscent of Panera Bread) combine dough at centralized off-site areas after which ship that dough to their retail areas for baking and sale,” that means that the bread just isn’t technically “produced” on web site, Stack mentioned.
The minor quirk in language may have massive implications: If Flynn’s Panera Bread shops don’t combine dough on-site, they could be required to pay $20 an hour to workers in spite of everything.