California's new minimum-wage law for fast-food restaurants, which takes effect April 1, seems to not apply to Panera Bread or the handful of other chains that bake and serve their own loaves of bread. Wonder why?

It's pretty likely because one of the biggest Panera franchisees in the state is an old friend of Gavin Newsom.

Bloomberg has the story today about the bread exception to the new law, which was signed back in October, and serves to replace the FAST Recovery Act, signed a year later. The earlier-passed law led to much pushback from the fast-food industry and to an eventual compromise, which resulted in the new law now about to take effect.

This law requires chains with 60 or more locations to pay minimum pay rates of $20 per hour — something that many chains are already doing around California in order to attract any workers at all. (The earlier law had set the rate at $22 for chains with 100 or more locations.)

Enter billionaire Greg Flynn, who, as Bloomberg reports, went to high school with Governor Gavin Newsom, and a few years ago acquired a Napa resort property that is managed by Newsom's Plumpjack Group.

Flynn has also reportedly donated generously to Newsom's political campaigns, including dropping $100,000 to the "No" campaign in the 2021 recall, and $64,800 to Newsom's reelection campaign in 2022.

Flynn was vocal in his opposition to the FAST Act, even though it would not impact most of the restaurants he owns in California, which are sit-down Applebee's locations. And, as one expert tells Bloomberg, it's not likely to make a huge difference in what pay rates are at Flynn's Panera locations in the state either.

"It’s kind of a silly exemption,” says former legislator Lorena Gonzalez, who helped introduce the original law. "If you look at where Paneras are located, and their clientele, it’s not as if they’re going to be able to hire people for less [than $20/hr]."

Still, as Bloomberg notes, the new law will give Panera — and other chains that bake bread like Great Harvest Bread Company — more "flexibility" to set lower wages where and when they can.

Flynn had argued that fast-casual restaurants should all be exempted, but that is not how the compromise worked out.

In response to inquiries about the bread exception, Newsom's office told Bloomberg the new law was the "result of countless hours of negotiations with dozens of stakeholders over two years."

Update: By February 29, Newsom and his team was vehemently denying all this. "The governor never met with Flynn about this bill, and this story is absurd,” said Alex Stack, a spokesperson for Newsom, speaking to the LA Times. :Our legal team has reviewed, and it appears Panera is not exempt from the law."

Panera isn't exempt because the law requires establishments categorized as bakeries to make their own dough on site and sell stand-alone loaves that are not part of another item. Proper bakeries and bagel shops will still be exempt.

Flynn also gave a statement to the Associated Press, confirming what Gonzalez said and saying, "Such a narrow exemption has very little practical value [if it applied to us]. As it applies to all of our peer restaurants in the fast casual segment, we will almost certainly have to offer market value wages in order to attract and retain employees."

Related: California Fast-Food Workers Will Be Paid $20/Hour Next Year, Under New Deal