Starbucks has agreed to pay approximately $35 million to settle claims involving over 15,000 workers in New York City who alleged they were denied stable schedules and had their hours arbitrarily cut. The settlement, announced by city officials, also includes an additional $3.4 million in civil penalties, as part of a larger agreement with the city’s Department of Consumer and Worker Protection. Furthermore, Starbucks has committed to adhering to the city’s Fair Workweek law in the future.
A spokesperson for Starbucks emphasized the company’s dedication to operating responsibly and complying with local laws, acknowledging the complexities involved with the city’s regulations. “This law is notoriously challenging to manage, and this isn’t just a Starbucks issue; nearly every retailer in the city faces these roadblocks,” said Jaci Anderson.
Under the settlement, most of the employees affected, who work in hourly positions, will receive $50 for each week worked from July 2021 through July 2024. Those who experienced violations after this period may still qualify for compensation by submitting complaints to the city’s department.
The total settlement amount of $38.9 million assures that employees who were laid off during recent store closures will have the opportunity to be reinstated at other locations operated by the company.
The investigation by city officials began in 2022 after receiving numerous complaints from workers at various Starbucks locations, expanding to include hundreds of stores across the city. The findings indicated that many Starbucks employees lacked regular schedules and were often subject to reductions in hours exceeding 15%, which complicated their ability to budget their weekly earnings and manage other life commitments such as childcare and education.
Additionally, the city’s investigation revealed that workers were frequently denied the opportunity to pick up extra shifts, effectively keeping them involuntarily in part-time positions.
This settlement arrives amidst a nationwide strike by Starbucks union workers at numerous locations, which commenced last month. There is currently a disagreement between the company and the union regarding the number of stores affected and the overall impact of the strike.
