A Panera Bread franchise owner in California said he will raise the minimum wage for his employees after accusations he benefited from ties to the state's governor to avoid hiking pay.
A new state minimum wage law exemptscertain businesses that make and sell bread - a carveout that critics contended benefited Greg Flynn, a billionaire Panera franchise owner who attended high school with Democratic California Gov. Gavin Newsom and who has donated to the governor's campaign in the past.
The law, which takes effect on April 1, raises the minimum wage from $16 per hour to $20 for all fast food workers - except those working in businesses that produce and sell bread as a standalone menu item.
It's that exception that's driving the political accusations.
Both men have denied Flynn's influence over the new law. On Tuesday, Flynn told CNN that he has decided to raise the minimum pre-tip wage at all of his Panera Bread locations to $20 per hour, regardless of whether his fast-casual bakeries are exempt from the new minimum wage law or not.
"At Flynn Group, we are in the people business and believe our people are our most valuable assets," Flynn said. "Our goal is to attract and retain the best team members to deliver the restaurant experience our guests know and love."
Panera Bread franchise owners' ties fuel speculation
According to California public records, Flynn, whose company, The Flynn Group, has 24 Panera locations in California, donated several times to Newsom's 2022 re-election campaign and gave $100,000 in 2021 amid a conservative fight torecall the governor.
However, Flynn said he never personally met with Newsom about the minimum wage bill, though he did meet with Newsom's staff and a group of other restaurant owners to discuss it.
Gov. Newsom is facing scrutiny over the state's new minimum wage law following a report that appears to have uncovered one of his longtime donors benefited from an exemption.
"I suggested the bill's language defining 'fast food restaurant' should be amended to exclude fast casual restaurants," Flynn said in a statement last week.
However, Flynn told CNN he never asked for an exemption or special considerations and that he was "surprised" when the bakery exemption appeared in the final legislation.
He also clarified that although he attended the same high school as Newsom, the two didn't meet until decades later.
A spokesperson for Newsom dismissed rumors of Flynn's influence over the fast food minimum wage bill outright, calling the story "absurd."
And despite Flynn's decision to raise the minimum wage for his California Panera locations, a Newsom spokesperson previously told CNN that the bakery would likely have been compelled to raise wages under the law after all.
"We understand 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," meaning that the bread is not technically "produced" on site, Alex Stack, a spokesperson for Newsom, said.
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FAQs
California Panera Bread restaurants will raise the minimum wage for its employees to $20 per hour after owner Greg Flynn faced criticism on the franchise's exception from state-mandated pay hikes. A new minimum wage state law will come into effect in California on April 1.
Is Panera Bread exempt from California's $20 minimum wage law after owner donated to Gov Newsom report? ›
California Gov. Gavin Newsom signed a law that exempts Panera Bread from a new $20-an-hour minimum wage hike for fast food chains after the billionaire owner of several of the chain's locations donated to his campaign, according to a report.
Is the minimum wage going up to $20 an hour in California? ›
Beginning April 1, 2024, California's minimum wage for fast food employees will increase to $20 per hour.
Why should California minimum wage be raised? ›
California's minimum is high enough to ensure that full-time workers earn more than the federal poverty threshold. The state's expensive cost of living, however, means a minimum wage income might not be enough to make ends meet.
Why is Panera excluded from the $20 minimum wage? ›
Baked into the legislation was a carve-out for chains that bake and sell their own bread. Bloomberg reported that the exemption is the result of the governor's relationship with billionaire and Panera franchisee Greg Flynn, who was initially a major opponent of the bill.
Why did Newsom exempt Panera? ›
Bloomberg on Wednesday reported the bakery exemption came about due to the influence of Newsom donor and Panera franchisee Greg Flynn. The new minimum wage requirement does not take effect until April, so it is difficult to say which restaurants will ultimately be exempt.
Who has to pay the $20 minimum wage? ›
Starting April 1, 2024, all “fast food restaurant employees” who are covered by the new law must be paid at least $20.00 per hour. Does an employer covered by the new law have to post a new minimum wage or Industrial Welfare Commissioner Order? Yes.
Does Starbucks pay $20 an hour? ›
In summary
Say you work at a fast food restaurant or coffee shop that bears the name of a national chain. Under California law, you're entitled to be paid at least $20 an hour starting Monday. Say you work at one of those stores, inside a grocery store. The grocery store, your employer, is exempt under the law.
Why did California raise the minimum wage for fast food workers? ›
“The vast majority of fast-food locations in California operate under the most profitable brands in the world.” “Those corporations need to pay their fair share and provide their operators with the resources they need to pay their workers a living wage without cutting jobs or passing the cost to consumers,” said Bryan.
Why is iT not good to raise minimum wage? ›
Raising the minimum wage would increase the cost of employing low-wage workers. As a result, some employers would employ fewer workers than they would have employed under a lower minimum wage. However, for certain workers or in some circ*mstances, employment could increase.
Currently, 34 states, territories and districts have minimum wages above the federal minimum wage of $7.25 per hour. Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour.
Why are fast food workers getting paid $20? ›
The new law, signed by Governor Gavin Newsom last fall, requires that fast-food chains with 60 or more locations nationwide pay their workers at least $20 an hour. The means the state's 553,000 fast-food workers will earn more than the state's $16 minimum wage for all other industries.
Does Panera have to pay $20 an hour in California? ›
A new minimum wage state law will come into effect in California on April 1. It requires all fast food employers to increase the minimum pay for workers from $16 per hour to $20 per hour, except for employees working for businesses that bake or sell bread as a standalone product.
Does Newsom own Panera? ›
Panera has 24 locations in California all owned by Gregg Flynn, Newsom's friend and billionaire campaign donor.
How much did Panera donate to Newsom? ›
In 2022, Flynn donated $64,800 to Newsom's reelection campaign. That includes a $32,400 contribution deposited three months before the law passed with the exemption in 2022, and a $14,800 donation that October after Newsom signed it.
Who is exempt from the minimum wage law in California? ›
There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards.
Does Newsom own Panera Bread? ›
Panera has 24 locations in California all owned by Gregg Flynn, Newsom's friend and billionaire campaign donor.
What is the Panera Bread controversy? ›
Fast casual restaurant chain Panera Bread is doing away with highly caffeinated Charged Lemonade drinks that have been at the center of multiple wrongful death lawsuits since last fall.
How much does Panera Bread pay in California? ›
How much does Panera Bread in California pay? Average Panera Bread hourly pay ranges from approximately $15.25 per hour for Opener to $27.93 per hour for Maintenance Technician. The average Panera Bread salary ranges from approximately $15,000 per year for Line Cook to $99,642 per year for Plant Manager.
