No, Panera Bread is not exempt from California’s $20 fast food minimum wage. The state’s fast food law contains a bakery carve-out that at first looked written for Panera, but the chain’s production methods don’t meet its requirements, and Panera’s largest California franchisee has publicly committed to paying $20 an hour regardless. If you work at a freestanding California Panera location, your pay should be at least $20 per hour.1ABC7 San Francisco. California Panera Franchisee to Raise Minimum Wage to $20 After Allegations of Favoritism by Newsom
The Law That Applies to Panera
Assembly Bill 1228 set a $20 minimum wage for fast food workers in California effective April 1, 2024. It applies to national chains with at least 60 locations that share a common brand and operate as limited-service restaurants, meaning you generally order and pay before you eat.2Department of Industrial Relations. Fast Food Minimum Wage Frequently Asked Questions Panera has more than 2,000 locations nationwide, so it clears the size threshold with room to spare.
The general state minimum wage is $16.90 per hour.3Department of Industrial Relations. Minimum Wage That’s a $3.10 gap for every hour worked, which is why whether a chain is covered matters so much on payday.
What the Bakery Exemption Actually Requires
The provision that put Panera in the news is in California Labor Code Section 1474. A restaurant is not a “fast food restaurant” for purposes of the law if it operates a bakery that produces bread for sale on the restaurant’s own premises, where the bread qualifies under the federal definition in 21 CFR Part 136 and is sold as a stand-alone menu item rather than only as part of a sandwich or other dish. The restaurant must have been operating this way as of September 15, 2023, and must continue to do so.4California Legislative Information. California Code Labor Code 1474
Two conditions do most of the work. The bread has to be produced at the restaurant itself, not shipped in from a central facility and reheated. And the bread has to be sold on its own, not just baked into sandwiches. Miss either one and the exemption doesn’t apply.
The federal bread standard the statute points to sets its own compositional rules: yeast-leavened dough, specific flour and moistening ingredients, and at least 62 percent total solids in the finished product.5eCFR. 21 CFR 136.110 – Bread, Rolls, and Buns
Why Panera Doesn’t Qualify
Panera calls itself a “bakery-cafe,” but the way it actually makes bread is the problem. For years, the chain ran regional fresh dough facilities that mixed dough and shipped it to individual restaurants for shaping and baking. More recently, Panera has been closing those facilities and moving to a par-baked model, where products arrive partially baked from outside producers and are finished in restaurant ovens.
Neither setup satisfies the statute’s requirement that bread be produced for sale on the establishment’s premises. Receiving dough or half-baked loaves from a commissary and running them through an oven isn’t operating an on-site bakery in the way Section 1474 describes. The governor’s office reached the same conclusion when the question first came up, finding the exemption likely does not cover Panera given its centralized production.
The stand-alone-sale question is also awkward for the chain. Panera does sell bread bowls, baguettes, and loaves by themselves, but its core business is sandwiches, soups, and salads. No official ruling has granted Panera an exemption, and the company has not publicly claimed one.
How the Controversy Started
Bloomberg News reported in early 2024 that the bakery language appeared to have been shaped to benefit one company in particular. Greg Flynn, founder of Flynn Restaurant Group and a campaign donor to Governor Gavin Newsom, operates roughly two dozen Panera locations in California. Critics said the carve-out was inserted at his request.
Newsom called the claim “absurd” and said bakery discussions were part of broader negotiations with unions and industry. Flynn said he never asked for an exemption, though he acknowledged sitting in group meetings with the governor’s staff and other restaurant owners. Amid the backlash, Flynn announced he would pay $20 an hour at all of his California Panera locations whether the exemption applied or not.1ABC7 San Francisco. California Panera Franchisee to Raise Minimum Wage to $20 After Allegations of Favoritism by Newsom That decision made the legal argument moot for his employees.
What You Should Be Paid at a California Panera
Your base rate at a freestanding California Panera should be at least $20 per hour. That’s the floor.
California overtime rules stack on top. You get 1.5 times your regular rate for hours over eight in a day or 40 in a week, and double time after 12 hours in a day. On a $20 base, that’s at least $30 an hour for overtime and $40 an hour for double time.
One boundary worth knowing: some chain locations sit inside airports, hotels, stadiums, theme parks, museums, casinos, corporate campuses, or on public land under concession agreements. Section 1474 excludes those settings from the fast food wage even when the brand is otherwise covered.4California Legislative Information. California Code Labor Code 1474 A Panera cafe inside an airport terminal, for example, would fall under the general $16.90 rate.3Department of Industrial Relations. Minimum Wage
What to Do If You’re Being Underpaid
If you’re making less than $20 per hour at a covered Panera location, you have two options. You can file an individual wage claim with the Labor Commissioner’s Wage Claim Adjudication Unit, which handles your own case and can order your employer to pay what’s owed. Or you can file a Report of Labor Law Violation with the Bureau of Field Enforcement, which investigates the employer’s practices more broadly but doesn’t recover your individual back wages.2Department of Industrial Relations. Fast Food Minimum Wage Frequently Asked Questions
Employers who pay below the required minimum face civil penalties and must pay restitution of the unpaid wages plus liquidated damages equal to the amount owed.6California Legislative Information. California Code 1197.1 – Wages, Hours and Working Conditions If your employer shorts you $3.10 an hour for months, you can potentially recover every dollar of that shortfall and an equal amount on top of it.
Before you file, gather your pay stubs, time records, and anything in writing about your pay rate. The filing process is free, and you don’t need a lawyer. Retaliating against a worker for filing a wage claim or reporting a violation is illegal.