LOS ANGELES (KABC) — California Gov. Gavin Newsom is facing scrutiny over the state's new minimum wage law after a report apparently revealed that one of his longtime donors benefited from an exemption in the law.
When the $20 minimum wage law was announced, it was no secret that places like Panera Bread would be exempt, and many people wondered why.
The reason given was that the restaurant, considered “fast food” by most people, baked its own bread. In fact, the exemption is quite specific and intended for chains that not only bake bread but also sell it as a standalone product.
Bloomberg News has revealed that a billionaire Bay Area restaurant owner who owns two dozen Panera franchises has donated at least $173,000 to Newsom since 2021.
That franchise owner, Greg Flynn, was quoted in 2022 as saying that the wage increase bill would “all but kill” the franchising business model in the state. Now the top Republican in the California legislature has called for an investigation and called the deal crooked.
In a statement to ABC News, a Newsom spokesman said the minimum wage law was “the result of countless hours of negotiations with dozens of stakeholders over two years.”
The bill's lead author is Pasadena Rep. Chris Holden. Asked about the exemption reported by Bloomberg, his chief of staff replied: “We don't know how it came about.”
Most fast food chains like McDonald's and Chipotle are not exempt from this law. Chipotle said it is considering a price increase to offset the additional costs.
This state minimum wage increase goes into effect on April 1st.