Starbucks has agreed to pay $38.9 million to resolve claims brought by New York City, after the coffee chain allegedly violated a local law requiring stable and predictable work schedules over half a million times across three years, the office of Mayor Eric Adams announced on Monday.
The office noted that the settlement marks the largest ever regarding a worker protection law in New York City.
The settlement, dated 26 November, found that Starbucks routinely failed to provide regular schedules, reduced employees’ hours without their written consent, and assigned shifts to new hires before offering them to existing staff, all in breach of a 2017 city law.
Under the terms, $35.5 million will be distributed among over 15,000 workers, with an additional $3.4 million covering penalties and costs.
In a statement, Starbucks said it supports the law’s intent but acknowledged that compliance can be challenging. For instance, if an employee calls out of a shift and another is asked to cover it, this may constitute a violation.
According to Adams’ office, affected workers will receive their payments this winter, with $50 provided for each week worked in an hourly position from 4 July 2021 to 7 July 2024.
The New York City law was among the first in the United States to curb “on-call scheduling,” a practice where service, retail, and fast-food workers are asked to work or have shifts cancelled at short notice. Similar regulations have been enacted in Oregon, Los Angeles, Chicago, San Francisco, and other US cities. Business groups have criticised the laws, claiming they are impractical and may lead to reduced employment.
AJ