(KTLA) — Panera Bread is exempt from following one of California’s newest laws, according to multiple reports. The new law will raise fast-food workers’ minimum wage to $20 per hour and will take effect beginning April 1.
The new law doesn’t recognize places that operate “a bakery that produces for sale on the establishment’s premises bread” as fast food, according to the law’s text.
Why the line was drawn at bread remains unclear.
“That’s part of the sausage-making,” Gov. Gavin Newsom said during a news conference when asked about the exemption, Insider reported.
However, Newsom pushed for the exemption, people familiar with the matter told Bloomberg. One of the primary beneficiaries of the exemption is Greg Flynn, a billionaire and longtime Newsom donor who has two dozen Panera Bread locations in California.
Flynn has also been involved in Newsom’s campaigns, donating $100,000 in 2021 to help Newsom fight against a recall and $64,800 in 2022, which went to the governor’s reelection campaign, according to The Sun.
Flynn denies that he played a role in crafting the bread exemption, Bloomberg reported.
However, people who spoke to Bloomberg under the condition of anonymity said “he urged the governor’s top aides to reconsider whether fast-casual chains such as Panera should be classified as fast food.”
While the fast-casual exemption wasn’t adopted, the bread-making exemption was. The rationale for adopting the exemption was due to “the governor’s longstanding relationship with a Panera franchisee,” one person said.
“This legislation was the result of countless hours of negotiations with dozens of stakeholders over two years. Staff in the governor’s office met with dozens of business owners as well as union representatives, as is expected when policies of this consequence are moving through the Legislature,” Alex Stack, a spokesperson in the Governor’s Office, said in an emailed statement to KTLA.
KTLA reached out to Panera Bread and Flynn Group, the company that operates multiple Panera locations in California, but didn’t hear back in time for publication.
Even with the exemption, the new law will benefit about 500,000 fast-food workers statewide.
California’s fast-food workers will have the highest guaranteed base salary in the industry. The state’s minimum wage for all other workers — $15.50 per hour — is already among the highest in the United States, the Associated Press reported last September.
As of Jan.1, the current minimum wage in California is $16.
In 2022, the minimum wage for fast-food workers in California was $16.21, or just over $34,000 per year, according to the U.S. Bureau of Labor Statistics.
According to the Public Policy Institute of California and the Stanford Center on Poverty and Equality, that income is just below the California Poverty Measure for a family of four.
