Coffee giant Starbucks has agreed to a significant settlement with New York City authorities, resolving allegations of widespread violations of local labour scheduling laws. The company will pay approximately $35 million in restitution to more than 15,000 hourly workers and an additional $3.4 million in civil penalties, bringing the total settlement to $38.9 million.
Details of the Violations and Settlement
New York City's Department of Consumer and Worker Protection announced the agreement on Monday. The investigation, which began in 2022 after dozens of complaints, found that Starbucks routinely failed to provide stable work schedules. The probe, expanded to cover hundreds of city stores, revealed that most employees never received regular schedules. The company was found to have arbitrarily cut workers' hours by more than 15%, creating financial uncertainty and making it difficult for staff to plan for childcare, education, or other commitments.
Furthermore, the city found that Starbucks routinely denied workers the opportunity to pick up extra shifts, effectively keeping them in involuntary part-time status. Under the settlement terms, most affected hourly employees will receive $50 for each week worked between July 2021 and July 2024. Workers who experienced violations after July 2024 may also be eligible for compensation by filing a complaint.
Future Compliance and Worker Reinstatement
A crucial part of the agreement mandates that Starbucks must comply with New York City's Fair Workweek law moving forward. This law is designed to protect hourly workers in the retail and food service sectors from unpredictable scheduling practices. The $38.9 million settlement also guarantees that employees laid off during recent store closings in the city will get the chance for reinstatement at other company locations.
In a statement, Starbucks spokeswoman Jaci Anderson said the company is committed to operating responsibly and in compliance with local laws. However, she noted the complexities of the city's regulation, stating, "This (law) is notoriously challenging to manage and this isn't just a Starbucks issue, nearly every retailer in the city faces these roadblocks."
Broader Context and Union Activity
This settlement with New York City authorities arrives amid ongoing labour tensions for Starbucks nationally. The company's union is currently engaged in a nationwide strike at dozens of locations that began last month. The scope and impact of this strike remain points of contention between the company and union representatives.
The case highlights the growing scrutiny on corporate scheduling practices, especially in major metropolitan areas with specific worker protection laws. For the thousands of affected baristas and hourly staff in New York City, the settlement offers both financial redress and a promise of more predictable work hours in the future, as Starbucks commits to adhering to the Fair Workweek standards.
