Lawmakers call for investigation into Newsom exempting Panera Bread from $20 fast food wage law

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CALIFORNIA – Governor Gavin Newsom’s administration denied, Thursday, a news report that he pushed for an exception to the state’s new $20 fast-food minimum wage law that benefits campaign donor and Panera Bread franchisee Greg Flynn.

Assembly Member James Gallagher (R – Yuba City) is requesting an investigation after Bloomberg News reported that Flynn contributed tens of thousands of dollars to reelect Newsom, who then demanded the exemption in the crafting of the law – Assembly Bill 1228. 

Fast food restaurant exemption

The law requires that national fast food chains, defined as a set of limited-service restaurants consisting of more than 60 establishments nationally, implement the $20 minimum wage on April 1, 2024.

However, the law states that “fast food restaurant” does not apply to establishments that produce for sale bread as a stand-alone menu item, and does not apply if the bread is available for sale solely as part of another menu item.

Pay-for-Play allegations

According to AP, campaign finance records show Flynn Properties and Flynn — the founder, chairman and CEO — have donated more than $220,000 to Newsom’s political campaigns since 2017.  Flynn Properties own 24 of the Panera Bread restaurants in California.

Newsom spokesperson Alex Stack said Thursday that the Governor never met with Flynn about this bill and this story is absurd. 

“Our legal team has reviewed and it appears Panera is not exempt,” said Stack. 

Newsom’s office said the exemption applies to those who produce bread on-site, and said some bakeries, including Panera, mix dough off-site at a centralized location before sending it to their restaurants for baking and sale. 

Call for investigation

Gallagher and other assembly members are calling on Attorney General Rob Bonta to launch an investigation.

“Campaign contributions should not buy you exemptions in legislation,” said Senate Minority Leader Brian Jones. 

Jones says the public deserves to know the truth about the allegations of Governor Newsom’s crony capitalism.

Economists say the new $20 per hour wage is expected to result in a 5% rise in the prices of fast-food items.

RELATED: CA proposing to define employer on-demand pay as payday loan

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