California Panera franchisee to raise minimum wage to $20 after allegations of favoritism by Newsom

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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