Communism at its finest
California’s $20-per-hour fast-food wage law was sold as a clean, simple promise: higher pay for workers. In practice, it came with carve-outs, exemptions, job losses, closures, and at least one highly connected beneficiary that sparked a statewide controversy.
Here’s the full picture — without the spin.
The law — and its built-in exceptions
The law does not apply to all fast-food workers. It applies only to limited-service chains with 60 or more locations nationwide, and even then, multiple exemptions remove entire categories of restaurants and workers from coverage.
1. The “bread bakery” exemption
A fast-food chain is exempt if it:
Produces and sells bread as a stand-alone menu item
Makes the dough and bakes it on-site
Was doing so before September 15, 2023
This exemption became the most controversial part of the law because it appeared tailored to benefit certain large bakery-café chains while leaving competitors fully exposed to the $20 mandate.
2. Grocery store exemptions
Fast-food restaurants operating inside grocery stores are exempt if:
The grocery store is 15,000 square feet or larger
More than 50% of sales are groceries for off-site consumption
The workers are employed by the grocery store, not the restaurant brand
This means workers doing nearly identical food prep and service can earn very different wages depending solely on which side of a wall they’re working on.
3. Airport, hotel, and venue exemptions
Fast-food locations tied to:
Airports
Hotels
Stadiums and large event centers
Theme parks
Museums
Casinos
are exempt from the $20 requirement.
4. Concession and campus carve-outs
Fast-food operations serving:
Corporate campuses
Private facilities
Certain public lands and parks
can also fall outside the law.
Who benefited the most?
The biggest political and media attention centered on Panera Bread.
Panera was widely reported as being positioned to benefit from the bread-bakery exemption, because it sells bread as a stand-alone item and operates at massive scale — something most fast-food competitors do not do.
Even though state regulators later tightened guidance on what qualifies as “producing” bread, the exemption language itself remains in the law, and it was written in a way that clearly favored large, specific business models rather than mom-and-pop shops or traditional fast-food chains.
The donor question: did the beneficiary donate to Gavin Newsom?
Yes.
The controversy exploded because Greg Flynn, a billionaire franchise owner whose companies operate Panera locations, has donated significant sums to California Governor Gavin Newsom.
Those donations included:
A six-figure contribution during Newsom’s recall fight
Additional large political donations in subsequent election cycles
The timing — combined with the unusually specific exemption language — raised widespread questions about political favoritism, even though Newsom publicly denied tailoring the law for any donor.
Meanwhile, for everyone else…
While exemptions protected certain operators, non-exempt chains absorbed the full cost — and responded predictably:
Roughly 18,000 fast-food jobs lost relative to national growth
Numerous California restaurant closures
Pizza Hut franchisees eliminated delivery driver jobs statewide
Increased automation, kiosks, and app-based ordering
Fewer hours and fewer workers per shift
In short: some businesses were shielded, others were forced to cut.
California vs. the rest of the country
Fast-food employment continues to grow in many other states. California, by comparison, fell behind after the law took effect.
That gap matters. It means workers elsewhere are gaining jobs while California workers face:
Fewer entry-level positions
Less scheduling flexibility
More automation replacing human labor
The bottom line
California’s $20 fast-food wage law is not a universal worker victory. It is a selective policy with:
Carve-outs for favored business models
Political donors positioned to benefit
Thousands of displaced workers
A shrinking fast-food job market relative to the rest of the U.S.
Raising wages is easy to sell.
Designing a fair system — without exemptions that protect insiders while others pay the price — is much harder.
And that’s the part California still hasn’t answered for.
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