Starbucks has agreed to pay nearly $39 million to settle New York City claims that it routinely violated local scheduling rules at hundreds of stores, marking the largest worker-protection settlement in the city’s history.
Under an agreement announced Monday by Mayor Eric Adams and the city’s Department of Consumer and Worker Protection (DCWP), Starbucks will pay more than $35.5 million in restitution to more than 15,000 current and former hourly workers.
The settlement also includes $3.4 million in civil penalties and costs for alleged violations of the city’s Fair Workweek Law, which requires employers to provide regular schedules, give advance notice of changes and pay premiums for last-minute changes, among other measures.
DCWP’s investigation, launched in 2022, concluded that Starbucks committed more than 500,000 violations of the law. Regulators say the company failed to provide regular schedules, cut hours by more than 15% without consent, denied opportunities to pick up additional shifts and kept workers involuntarily in part-time roles while hiring new staff.
New York City
In a public statement yesterday, Starbucks said that while it remains “committed to compliance” with the law, “its complexity creates real-world challenges.”
“Here’s the reality: Even minor schedule changes can trigger a violation under the law,” the company wrote. “For example, if a partner who normally works 20 hours a week calls out for three scheduled hours and we ask someone else to cover that time, that could be considered a violation. The law treats almost any adjustment as a potential issue.”
According to DCN’s analysis of past DCWP settlement announcements, at least 13 fast-food companies (including Starbucks) have reached settlements totaling more than $71.6 million in restitution and civil penalties since the New York City Fair Workweek Law took effect in 2017.
Other companies that have settled include Chipotle ($21 million in combined restitution and penalties), Panda Express ($3.45 million) and Paris Baguette ($2.97 million).
Complaints about Starbucks’ scheduling practices have escalated alongside a national union drive that began with the first successful store unionization in Buffalo, New York, in late 2021, and has since spread to hundreds of locations.
DCWP’s probe into Starbucks scheduling in New York has come alongside a wave of unfair labor practice allegations before the National Labor Relations Board and, more recently, an ongoing national strike led by Starbucks Workers United.
Starbucks, which refers to all employees as “partners,” has maintained that it is an industry leader in hourly employee pay and benefits. “It’s a job people choose and stay with,” the company said. “Our turnover is less than half the industry average, and every year, more than a million people apply to join us.”
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