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The New Minimum Wage Law in California does not apply to Panera Bread.

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According to several sources, Panera Bread has been granted an exemption from the most recent minimum wage legislation in California. The fast-food business will be exempt from the law, which increases the minimum wage for workers in fast-food establishments to $20 per hour on April 1.

Without providing a clear explanation, the legislation specifically excludes from the definition of fast food outlets those that run “a bakery that produces for sale on the establishment’s premises bread.”

At a press conference, Governor Gavin Newsom responded to inquiries over the exemption by characterizing it as a step in the legislative process, as Insider reported.

Bloomberg was informed by individuals with knowledge of the situation that Newsom pushed for the exemption. One significant winner is millionaire and well-known Newsom ally Greg Flynn, who owns multiple Panera Bread shops around California.

According to The Sun, Flynn has been heavily involved in assisting Newsom with his political pursuits, giving large quantities of money to his campaigns—$64,800 for Newsom’s reelection campaign in 2022 and $100,000 in 2021 to fight a recall. Flynn has denied any involvement, but Bloomberg’s sources say he had a say in the decision-making process over the bread exemption.

The exception for businesses that make bread was approved, but the one for fast-casual restaurants like Panera was not. It has been speculated that the governor’s strong relationship with a Panera franchisee played a role in this decision.

In response to questions, a spokesman for the governor’s office named Alex Stack stressed that the legislation was enacted after a two-year long process of stakeholder input.

Before this article was published, KTLA tried to get in touch with Flynn Holdings and Panera Bread for comments, but neither company responded.

The new rule will still benefit about 500,000 fast-food workers statewide, guaranteeing them the highest guaranteed base income in the industry, even with Panera’s exemption.

According to the Associated Press, California has one of the highest minimum wages in the country at $15.50 per hour for other workers. According to the U.S. Bureau of Labor Statistics and the Public Policy Institute of California, the minimum pay for fast-food workers in California in 2022 was $16.21, which was slightly less than the California Poverty Measure for a family of four.

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