Starbucks has agreed to pay $38.9 million to resolve claims brought by New York City after allegedly violating 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.
According to the office, this settlement marks the largest financial resolution ever concerning a worker protection law in New York City. Over 15,000 employees will benefit. Starbucks was found to have routinely failed to provide consistent schedules, reduced employees’ hours without consent, and assigned shifts to new hires before offering them to existing staff, violating a 2017 city ordinance.
Under the settlement, $35.5 million will be distributed directly to employees, with an additional $3.4 million covering fines and other costs. Starbucks stated it supports the law’s intent but acknowledged that compliance can be challenging. For example, if an employee cancels a shift and another is asked to cover it, the law may technically be breached.
According to Adams’ office, affected employees will receive their payments this winter, receiving $50 for each week worked in an hourly role between 4 July 2021 and 7 July 2024. The compensation is intended to address the disruption caused by unpredictable scheduling practices that affected employees’ work-life balance.
The New York City law was among the first in the United States to limit “on-call scheduling,” a practice in which retail, service, and fast-food workers may have shifts cancelled or called in at short notice. Similar legislation exists in Oregon, Los Angeles, Chicago, San Francisco, and other US cities. Business groups have criticised these laws as impractical, warning they may lead to reduced employment opportunities and challenges for business operations.
AJ