Fast-food workers will make $20 an hour in California. Here's why Panera Bread was exempted from the new law.

• A new California law increases the hourly wage for fast-food workers to $20 an hour in April 2024.
• But a quirky exemption for restaurants that make and sell bread like Panera Bread are exempted.

Starting next April, 557,000 fast-food workers in California will get a nearly 30% pay increase to $20 an hour at 30,000 restaurants in the state.

But if you work at Panera Bread or Boudin Bakery, don't expect to benefit from the wage boost.

New fast-food legislation signed into law Thursday by California Gov. Gavin Newsom does not include quick-service restaurants that make and sell their own bread.

It's unclear how restaurant chains like Panera Bread came to be exempt from the fast-food law.

"That's part of the sausage-making," Newsom said when asked about the quirky exemption during a press conference.

An establishment that bakes bread for sale on its premises is not considered a fast-food restaurant, the new law states. "This exemption applies only where the establishment produces for sale bread as a stand-alone menu item, and does not apply if the bread is available for sale solely as part of another menu item."

California's current minimum wage is $15.50. It goes up to $16 an hour in January. Under the new law signed by Newsom, thousands of fast-food workers making minimum wage in the state will get another increase to $20 an hour in April.

The new law replaces the controversial FAST Recovery Act, which called for the minimum wage for fast food workers to increase to $22 an hour in 2023.

Newsom signed the FAST Act into law last year. But corporate chains such as McDonald's, Chipotle, and Chick-fil-A, and franchise advocacy groups fought the law. A coalition of restaurant industry organizations, who said the law could raise costs for fast-food restaurants by $3 billion, rallied to get a referendum on the ballot.

The new law, AB 1228, represents a compromise between labor unions representing fast food workers and the restaurant industry.

Besides dropping the minimum wage boost to $20 an hour, the new law allows a fast-food council to adjust only wages. In the previous legislation, the panel had more powers over workplace conditions, training, and working conditions.

The council can increase the minimum wage yearly by up to 3.5% or the change in the US consumer price index, whichever is less. The FAST Act exempted bakeries that make and sell bread, and that provision remained in the new bill.

Newsom said the Panera and Boudin exemption was part of the "original bill, and we went back and forth, and that was part of the negotiation. It's the nature of negotiation trying to get a referendum off the ballot."