Starbucks to Pay $38.9 Million Over Violations of Worker Scheduling Rules

Starbucks has agreed to pay $38.9 million to settle claims brought by New York City, after the coffee chain allegedly breached a local law requiring predictable and stable schedules for employees over half a million times during a three-year period, Mayor Eric Adams’ office announced on Monday.

According to the office, this settlement marks the largest ever involving a worker protection law in the city, capping a three-year investigation.

The settlement, dated 26 November, outlines that Starbucks routinely failed to provide regular schedules, reduced workers’ hours without written consent, and assigned shifts to new hires before offering them to existing staff, all in violation of a 2017 city ordinance.

Under the agreement, Starbucks will pay $35.5 million to over 15,000 workers, in addition to $3.4 million in penalties and associated costs.

In a statement, Starbucks indicated that while it supports the law’s intent, compliance presents challenges. For example, if an employee calls out of a shift and another is asked to cover, the law may technically be violated.

Adams’ office stated that affected employees will receive payments this winter and will be compensated $50 for each week worked in an hourly role between 4 July 2021 and 7 July 2024.

The New York City law was among the first in the United States to limit “on-call scheduling,” a practice where service, retail, or fast food workers are called in or have shifts cancelled at short notice. Similar laws have been enacted in Oregon, Los Angeles, Chicago, San Francisco, and several other cities. Business groups have criticised these laws as impractical, warning they may result in reduced employment opportunities.

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