OAN’s Brooke Mallory
6:23 PM – Thursday, February 29, 2024
Following the billionaire owner of Panera Bread restaurants making major financial contributions to the California governor, Gavin Newsom signed a bill exempting the chain restaurant from a new $20 minimum wage raise.
Governor Newsom (D-Calif.) signed a bill into law in September that is meant to increase fast food employees’ minimum pay from $16 to $20 per hour.
[California] fast food workers will have a minimum wage of $20/hour beginning on April 1st—$4 higher than the U.S minimum wage for 2024. This applies to chains with 60 or more locations across the nation, and is effective as of April 1, 2024, according to ABC 7 News.
However, an important note to point out is that the Fast Food Accountability and Standards Recovery Act (FAST Act) has a unique exemption stating, “chains that bake bread and sell it as a standalone item” will not be forced to raise their minimum wage, according to Bloomberg News.
According to reports, Newsom requested the exemption, which benefits a number of people, including wealthy CEO Greg Flynn of Flynn Restaurant Group, who controls at least 24 Panera Bread locations in the state.
Bloomberg News also reported that Flynn went to the same high school as Newsom, and that he has given over $164,800 to Newsom’s gubernatorial campaigns.
According to disclosure forms, Flynn is one of the biggest franchisees in the U.S., with thousands of brands under his belt, including Wendy’s, Taco Bell, Applebee’s, and Pizza Hut. He also purchased a Napa Valley resort run by Newsom’s hospitality company in 2014.
Flynn denied any involvement with Newsom regarding the addition of the law’s bread exemption.
Last month, Newsom informed reporters that the exemption was “part of the sausage-making” process.
However, the National Restaurant Association’s CEO Michelle Korsmo said at a convention last year that “everyone’s scratching their heads” regarding the “random” bread exemption.
“You may be celebrating or you may be lamenting the bakery exemption,” Korsmo said, according to Bloomberg News. “But remember, all of that comes through relationships.”
When the bill was initially proposed in 2022, Flynn openly opposed it. He said that increasing the minimum wage for workers in fast food establishments would negatively impact franchise owners’ bottom lines and raise prices for consumers.
According to Bloomberg, Flynn even urged Newsom’s aides to reevaluate whether Panera Bread qualifies as fast food.
The union that was advocating for the increase in the minimum wage allegedly accepted the exception for bread sellers as a compromise in order to win the governor’s backing. This led to its inclusion in the legislation.
In terms of other businesses facing the impending law, Chipotle’s chief financial and administrative officer, Jack Hartung, additionally issued a warning earlier this month stating that customers in California can anticipate “significant” price increases as a result of the increase in minimum wage.
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