by New York City, NY — Starbucks will pay approximately $35 million to over 15,000 New York City employees to resolve claims that the company denied stable schedules and arbitrarily reduced work hours, city officials announced Monday.
In addition to the payout to workers, Starbucks will pay $3.4 million in civil penalties as part of an agreement with the Department of Consumer and Worker Protection (DCWP). The company has also committed to fully comply with the city’s Fair Workweek law going forward.
A Starbucks spokeswoman, Jaci Anderson, said the company is committed to responsible operations and compliance with local laws, but emphasized the complexities of managing the city’s scheduling regulations. She added that the law is “notoriously challenging to manage” and affects many retailers in New York City, not just Starbucks.
Compensation for Workers
Under the settlement, most hourly employees will receive $50 for each week worked from July 2021 through July 2024. Employees who experienced violations after that period may still be eligible for compensation by submitting a complaint with the DCWP.
The agreement also ensures that employees laid off during recent store closures in the city will have the opportunity for reinstatement at other Starbucks locations.
City Investigation Reveals Widespread Issues
The investigation began in 2022 after the city received dozens of complaints from Starbucks employees. Officials later expanded the probe to hundreds of stores across the city.
The DCWP found that many Starbucks employees never received regular schedules, and the company routinely cut hours by more than 15%, making it difficult for workers to predict weekly earnings and plan for child care, education, or other jobs.
Additionally, employees were often denied the chance to pick up extra shifts, keeping them involuntarily in part-time status, the city said.
Context Amid Nationwide Union Strike
This settlement comes as Starbucks faces a nationwide union strike, which began last month at dozens of locations. While the exact number of affected stores and the strike’s overall impact remain disputed between Starbucks and union representatives, the settlement highlights the company’s ongoing labor challenges in major markets.
Commitment to Compliance and Fair Workweek Law
Starbucks has pledged to comply with the city’s Fair Workweek law, which is designed to give workers more predictable schedules and opportunities for additional hours. The law requires employers to provide advanced notice of schedules and prevents arbitrary reductions in hours without proper notice or consent.
The DCWP stressed that the settlement is intended to protect workers’ rights, ensure fair compensation, and prevent future scheduling violations across Starbucks’ New York City stores.
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