LOS ANGELES, California – Governor Gavin Newsom is under scrutiny for California’s new minimum wage law after reports suggest that one of his long-time donors may have benefitted from an exemption in the legislation. The $20 minimum wage law unveiled without surprise exempted places like Panera Bread, prompting questions on the reasons behind such exclusions.
This exemption specifically targets chains that both bake and sell bread as a standalone item, such as Panera Bread. The billionaire restaurant owner behind two dozen Panera franchises in the Bay Area, Greg Flynn, has reportedly donated over $173,000 to Newsom since 2021, raising concerns about potential conflicts of interest.
In an effort to shed light on the issue, Bloomberg News uncovered Flynn’s critical remarks in 2022, warning that the wage increase bill could severely impact the franchising business model in the state. These revelations have prompted calls for investigation from the top Republican in the California Assembly, who has denounced the deal as unethical.
A spokesperson for Newsom defended the minimum wage law as a product of extensive negotiations with various stakeholders over a two-year period. However, Pasadena Assemblyman Chris Holden, the bill’s lead author, appeared unaware of the exemption concerning Panera Bread, stating, “We don’t know how that came about.”
While most major fast-food chains are not exempt from the law, popular chains like McDonald’s and Chipotle are exploring potential price increases to offset the additional costs. With the state minimum wage increase slated to take effect on April 1, the implications of these exemptions and their potential impact on businesses remain a topic of interest and concern.