A billionaire restaurant mogul and Gov. Gavin Newsom donor said March 5 that the Panera Bread establishments he owns across the Golden State will pay employees the minimum wage of $20 per hour established by the state’s recent fast-food restaurant law.
Controversy arose last week regarding whether Panera Bread would be exempt from the new law.
Assembly Bill 1228, signed by Mr. Newsom last year, establishes a minimum wage of $20 per hour for employees of fast-food chains with over 60 nationwide locations sharing common brands, starting April 1. The law includes an exception for some bakeries that sell bread.
“Regardless of whether the bakery exemption in AB1228 applies to our bakery-cafes, California locations owned and operated by Flynn Group will increase all hourly pre-tip wages to $20 per hour or higher effective April 1,” said Greg Flynn, CEO of Flynn Group, which owns 24 Panera Bread restaurants in California, in a statement.
The governor’s office dismissed the notion Feb. 29 after it made headlines.
“The Governor never met with Flynn about this bill and this story is absurd,” Alex Stack, spokesperson for the governor, told The Epoch Times by email. “Our legal team has reviewed, and it appears Panera is not exempt from the law.”
As per the law, the term “fast food restaurant” excludes an establishment that operates a bakery producing bread on the premises for sale as a stand-alone menu item, not as part of another item.
According to Mr. Stack, who received advice from the governor’s legal team, the exemption requires all bread-making processes to occur onsite. As chain bakeries like Panera Bread mix dough offsite and deliver it to locations for baking, they do not meet the criteria.
One restaurant that may qualify for the bakery exemption is the Great Harvest Bread Company, with four California locations out of over 200 nationwide. Company staff confirmed to The Epoch Times that all bread is made from scratch onsite each morning.
While Mr. Flynn hasn’t confirmed his agreement with the Newsom administration’s interpretation of the law, he previously stated that the exemption holds “very little practical value,” because Panera would need to offer similar wage payments to attract and retain workers while competing with other fast-food franchises.
Additionally, Mr. Flynn told The Epoch Times that he never met with Mr. Newsom regarding the bill, despite his opposition to the minimum wage increase.
“It is true that I opposed AB1228, as did thousands of other California restaurant owners,” Mr. Flynn told The Epoch Times by email Feb. 29. “[But] at no time did I ask for an exemption or special considerations. In fact, the idea never even occurred to me, and I was surprised when the exemption appeared in the final legislation.”
There are 188 Panera Bread locations in California out of 2,183 nationwide, according to the company’s website. However, it’s unclear whether the minimum wage law will apply to all Panera restaurants in California.
Mr. Newsom previously described the bakery exception as part of the legislative “sausage making” process.
While acknowledging that such practices are fairly common in the legislative process, a Republican lawmaker advocated for increased transparency regarding negotiated exemptions and their public policy justifications.
“We have to get to restoring the public’s trust that this was not done for a donor or for a particular person, that there is actually a reason behind this,” Mr. Patterson said. “Because the only way government works is if people actually trust that it’s serving in the interest of the people.”
Additionally, Mr. Patterson said that the governor himself could “put the whole thing to rest” by informing the public about the rationale behind the exemption.
