Republican lawmakers in California are expressing outrage over a new law that raises the minimum wage for fast-food workers—except for those who work at bakeries such as Panera Bread.
The top Republican leader in the California State Assembly, James Gallagher, is demanding an investigation into the special exemption, which he calls a “crooked deal” between Democrat Gov. Gavin Newsom and major campaign donor Greg Flynn.
According to the International Franchise Association, Flynn Restaurant Group is the “largest franchise operator in the world,” with approximately 2,400 Applebee’s, Taco Bell, Panera, Arby’s, Pizza Hut, and Wendy’s restaurants in 44 states. In California alone, Flynn Restaurant Group operates more than two dozen Panera franchises.
“Can any franchisee get an exemption from the $20 minimum wage law or do they need to donate more than $150k to Newsom first?” Mr. Gallagher wrote in a post on X.
“Panera couldn’t afford Democrat lawmakers’ $20 minimum wage requirement for fast food restaurants,” California Senate Minority Leader Brian Jones posted on X. “Lucky for them, their franchise owner donated over $160,000 to Gov. Newsom, who got them an exemption,” he wrote.
The new minimum wage law, Assembly Bill No. 1228, specifically calls for an establishment that “operates a bakery,” or a restaurant that makes and sells bread, to be excluded from the wage increase.
“This exemption applies only where the establishment produces for sale bread as a stand-alone menu item, and does not apply if the bread is available for sale solely as part of another menu item,” the new law states.
Mr. Newsom explained that the exemption was the result of a negotiation process with stakeholders. “That’s part of the sausage-making,” he told reporters in 2023 after signing the agreement into law.
“It’s not just Jack in the Box, it’s not just McDonald’s, there are a lot of different players, and this affects a lot of different franchises and different models as it relates to that and different conditions and environments. That was all part of the give and take and that was the collective wisdom of the Legislature and ultimately led to my signature,” he told the media.
“Campaign contributions should not buy you carve-outs in legislation,” State Sen. Jones responded. “This isn’t sausage making as the governor suggests, it’s crony capitalism.”
“You have to give money to Gavin Newsom’s campaign to get a special break,” Richard Grenell, founder of Fix California, wrote in a post on X.
“The corruption is part of their system,” he said, suggesting that other restaurants cannot benefit from the minimum wage increase because they “lacked substantial donations.” Regardless, he said, these establishments must comply with the new law and face possible layoffs.
The official account of political action group Recall Gavin Newsom posted, “If you pay your dues to the king you get whatever you want.”
The minimum wage increase for fast-food workers takes effect on April 1.
