Restaurant Partially Owned By Newsom Is Reportedly Paying Employees Below California’s New Minimum Wage

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Hailey Gomez General Assignment Reporter
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A California restaurant, partially owned by Democratic Gov. Gavin Newsom, is reportedly still offering some employees $16 an hour despite the state recently raising the minimum wage to $20, according to job listings.

The PlumpJack Café in Olympic Valley, California is owned by a Newsom-founded company called the PlumpJack Group. The Democratic governor notably placed his business holdings into a blind trust in 2018, prohibiting him from having a say in the restaurant’s offered wages, according to The Sacramento Bee. (RELATED: California’s Fast-Food Minimum Wage Hike Could Spell Trouble For Public Schools)

Job listings for the restaurant were posted on multiple employment marketplace sites, such as ZipRecruiter and Indeed, offering a range of openings from ‘host’ to ‘line cook’. While some options, such as line cook or pastry cook, listed their wages starting at $22 and $25 an hour, the host and busser openings, posted 27 days ago, listed their pay at only $16 an hour.

California’s newly raised minimum wage increase went into effect for fast-food restaurants statewide April 1, requiring workers to be paid at least $20 an hour. The legislation, which Newsom signed in September 2023, impacts 500,000 workers in the state, to which Newsom praised that the new law would be “fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

While Newsom advocated for the increase, restaurant owners have warned about the effects the new law will have on businesses throughout the blue state. A former Foster Freeze assistant general manager Monica Navarro told Fox Business on Wednesday that her store located in Lemoore, California shut down reportedly due to the hiked wages, laying off all the employees. Navarro stated that she not only noticed local businesses already beginning to shut down but that many employees she talked to were getting their hours “severely cut” now.

Chains such as Pizza Hut and Round Table Pizza previously reported to the state that they would be cutting 1,280 delivery drivers this year to prepare for the increase, according to the Wall Street Journal. Since last September fast food workers throughout the state have dropped 1.3%, with total private employment falling 0.2% within the same time frame.

“This is the reality of today’s restaurants,” a spokeswoman for Fat Brands, owner of Round Table Pizza locations in California, told the outlet. “Operators are doing their best to retain staff and keep doors open.”

Other restaurants, such as El Pollo Loco, will now be turning to automation to balance out the labor costs, automating some of the processes for making food, the WSJ reported.

Newsom received massive backlash after reports circulated that he allegedly pushed for an exemption which enabled Panera Bread franchise Greg Flynn, who donated over $100,000 to Newsom’s campaign in 2022, to get around the wage increase. Flynn’s chain restaurant was reportedly included in an exemption to the wage increase, which allows bakeries and restaurants located within “airports, hotels, large event centers, theme parks, museums, gambling establishments, corporate campuses, and certain public lands” to not have their minimum wages bumped up.

As Flynn reportedly sought to have his chain not be considered a fast food restaurant, the Service Employees Union, a group that pushed for the bill, allegedly decided to create the bakery exemption in an attempt to have Newsom sign the bill, according to Bloomberg.

Since the allegations against the governor, Newsom’s office and Flynn have stated that the chain restaurant will most likely not be exempt from the increase, according to the Associated Press.

“Such a narrow exemption has very little practical value. 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,” Flynn told the outlet.