Starbucks has reached a significant settlement with New York City officials, agreeing to pay approximately $35 million to more than 15,000 workers in response to claims regarding unstable scheduling and arbitrary cuts to work hours. Announced on Monday by city officials, the settlement aims to address allegations that the company failed to provide consistent schedules and systematically reduced employees’ hours.
In addition to the settlement, Starbucks will pay $3.4 million in civil penalties as part of its agreement with the city’s Department of Consumer and Worker Protection. The company has committed to comply with the city’s Fair Workweek law in the future, a statute designed to ensure more predictable scheduling for workers.
A company representative stated that Starbucks is dedicated to operating responsibly and adhering to local laws and regulations. However, she pointed out that navigating the complexities of New York City’s law poses challenges for many retailers, not just Starbucks.
The settlement includes compensation for hourly employees, who will receive $50 for each week worked from July 2021 through July 2024. Additionally, workers who faced violations after that period can file complaints to seek further compensation. The total settlement amount also provides assurance that employees laid off during recent store closures will have the opportunity to be reinstated at other company locations.
The city’s investigation began in 2022 after receiving numerous complaints from Starbucks workers regarding scheduling practices. The inquiry revealed that many employees did not receive regular schedules and that the company frequently reduced work hours by over 15%, complicating their ability to predict earnings and manage other life commitments like childcare or education. Many workers also reported being denied the opportunity to pick up additional shifts, leaving them with part-time status involuntarily.
This agreement arrives amid a nationwide strike by Starbucks’ union, which began last month and affects several locations across the country. The ongoing strike has spotlighted labor disputes, with both sides disputing the extent of its impact.
This development marks a notable effort to improve conditions for workers and ensures accountability from a major employer within the city, promoting fair labor practices in an evolving work environment.