A Panera Bread franchise owner in California has announced plans to increase the minimum wage for his employees following claims that he used his connections with the state governor to avoid higher pay rates.

A new state law, effective April 1, raises the minimum wage for fast food workers from $16 to $20 per hour. However, businesses that produce and sell bread as a standalone item are exempt from this increase. Critics argue that this exemption benefits Greg Flynn, a billionaire Panera franchisee with ties to Democratic Governor Gavin Newsom, who attended high school with Newsom and has contributed to his campaign.

Despite the controversy, Flynn has declared that he will raise the minimum pre-tip wage at all his Panera Bread locations to $20 per hour, regardless of the exemption. “At Flynn Group, we are in the people business and believe our team members are our most valuable assets,” Flynn stated. “Our goal is to attract and retain top talent to deliver the restaurant experience our guests value.”

Speculation about Flynn’s influence stems from his financial contributions to Newsom’s 2022 re-election campaign and a $100,000 donation in 2021 during a recall effort against the governor. However, Flynn insists he did not personally lobby Newsom about the wage law, though he did discuss the bill with Newsom’s staff and other restaurant owners. He expressed surprise when the bread exemption appeared in the final legislation and clarified that he did not request any special considerations. Flynn also noted that he and Newsom did not meet until years after high school.

Newsom’s spokesperson has dismissed the allegations as “absurd” and indicated that Panera Bread would likely have had to raise wages under the new law regardless of the exemption. Alex Stack, a spokesperson for Newsom, explained that many chain bakeries, like Panera Bread, produce dough at off-site locations, which may affect whether their bread is considered “produced” on site.