Starbucks will pay about $35 million to more than 15,000 New York City workers after investigators found the company reduced hours and failed to provide consistent work schedules, according to the Associated Press.
City officials said Monday the agreement also requires Starbucks to pay $3.4 million in civil penalties to the Department of Consumer and Worker Protection and to comply with the city’s Fair Workweek law moving forward.
That law requires predictable scheduling and protects workers from sudden cuts that can affect their income or ability to plan for child care, school, or other jobs.
In a statement, a company spokeswoman said Starbucks intends to operate responsibly across all of its markets, but noted the complexity of the city’s requirements.
“This (law) is notoriously challenging to manage and this isn’t just Starbucks issue, nearly every retailer in the city faces these roadblocks,” spokeswoman Jaci Anderson said.
Under the settlement, most hourly workers will receive $50 for every week they worked between July 2021 and July 2024.
Employees who believe they experienced violations after that period may still qualify for compensation by filing a complaint with the city.
The nearly $39 million settlement also ensures that employees affected by recent store closures in the city will be offered the opportunity to return to work at other Starbucks locations.
New York City’s investigation began in 2022 after officials received dozens of complaints from workers at various stores.
The inquiry expanded to hundreds of locations and found widespread issues, including inconsistent scheduling and routine reductions to employees’ hours of more than 15%.
According to investigators, workers often did not know what to expect in their weekly paychecks, making it difficult to plan day-to-day life or pursue additional income.
The city also reported that Starbucks frequently declined to let employees pick up more shifts, keeping many workers part-time despite their willingness to work additional hours.
The settlement comes as Starbucks faces a nationwide strike organized by its union, which began last month and continues at dozens of stores.
The two sides disagree over how many locations are participating and how significant the work stoppage has been.
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