Newsom’s office: Panera not exempt from $20 wage law
A day after Bloomberg reported that Gov. Gavin Newsom pushed for an exemption from a fast-food minimum wage law that benefits Panera Bread, Newsom’s office said it had reviewed the law and determined Panera is not exempt after all.
The law requires fastfood chains to increase their workers’ minimum wages to $20 an hour on April 1. It contains an exemption for fast-food restaurants that bake and sell their own bread, which Bloomberg reported effectively carves out Panera from the minimum wage requirements.
Bloomberg reported that the arrangement benefits longtime Newsom donor and business associate Greg Flynn, who owns two dozen Panera locations.
The Chronicle reached out to the governor’s office for comment Wednesday, the day the Bloomberg story broke.
At the time, Newsom’s office did not answer questions from the Chronicle about why Panera and other bakeries deserved a carve-out, whether Newsom spoke with Flynn about the legislation and about Newsom’s personal connections to Flynn. Spokesperson Alex Stack instead provided a statement in response to Bloomberg’s reporting.
“This legislation was the result of countless hours of negotiations with dozens of stakeholders over two years,” Stack told the Chronicle in the Wednesday email. “Staff in the Governor’s Office met with dozens of business owners as well as union representatives — as is expected when policies of this consequence are moving through the Legislature.”
A day later, after the Chronicle reported that a top Republican lawmaker
was calling for the governor to be investigated, Stack followed up with more information.
“The Governor never met with Flynn about this bill and this story is absurd,” Stack wrote in a
Thursday afternoon email. “Our legal team has reviewed and it appears Panera is not exempt from the law.”
Stack said lawyers for the governor’s office determined that Panera doesn’t meet the standard for a business that “produces” bread “for sale on the establishment’s premises” because “many chain bakeries (such as Panera Bread) mix dough at centralized off-site locations and then ship that dough to their retail locations for baking and sale.”
Panera Bread did not immediately respond to questions about whether it agrees with the governor’s interpretation or whether it plans to raise its California employees’ minimum wages.