California Gov. Gavin Newsom (D) said Panera Bread is not exempt from the state’s new minimum wage law amid claims that the law would benefit a Newsom donor who owns several Panera restaurants.
California’s minimum wage is $16 per hour. Starting April 1, most fast-food restaurants must pay their workers at least $20 an hour under new legislation that Newsom signed last year, but it does not apply to restaurants that have on-site bakeries and sell bread as a stand-alone menu item, The Associated Press reported.
According to a report by Bloomberg News, the bread and bakery exemption to the law came from Newsom himself and would benefit billionaire Greg Flynn, who owns more than 20 Panera restaurants in the state and has donated to Newsom’s campaigns.
Alex Stack, a spokesperson for Newsom, told the AP that the “story is absurd,” and that the governor’s legal team believes Panera Bread is not exempt from the law.
To be exempt from the minimum wage law under the bakery exemption, restaurants must produce bread on-site. Newsom’s office said chain bakeries like Panera mix dough at an off-site location and ship it to the restaurant to be baked.
Flynn reportedly told the AP that he met with Newsom’s staff about the bill but did not speak with the governor about it himself. He denied asking for special considerations and said he was surprised the exemption made it into the final piece of legislation.
After the law passed in 2023, Republican lawmakers in the state criticized Newsom for the potential personal connection in the bill.
“Californians deserve answers about Gavin’s crooked PaneraGate deal,” Assembly leader James Gallagher wrote on X, the platform formerly known as Twitter. “Newsom’s got no business lecturing anyone about democracy when he’s using his power to do favors for his special interest donors.”
California state Senate Minority Leader Brain Jones (R) authored a letter with Gallagher and Assemblyman Joe Patterson, asking state Attorney General Rob Bonta (D) to investigate the allegations of “pay-to-play” politics in the drafting of the bill.
The Hill has reached out to Newsom’s office for further comment.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
