Amidst ongoing strikes by Starbucks baristas, the coffee chain is now expected to pay out a large settlement to over 15,000 workers in New York City. Conceding to NYC’s labor laws, Starbucks is paying out a settlement of $35 million over accusations of mismanagement of workers and their complaints over scheduling issues. New York City officials confirmed that Starbucks violated local Fair Workweek laws, cutting hours abruptly and failing to provide stable scheduling.
Starbucks’ $35 million settlement is touted to be the largest worker-protection settlement in the history of the city, which marks a significant victory for workers.
The Starbucks settlement comes as a result of alleged violations of NY Fair Workweek laws, which govern matters of scheduling and fair pay. (Image: Pexels)
Starbucks’ $35 Million Labor Law Settlement Announced Following a Multi-Year Investigation
Starbucks’ Fair Workweek violation settlement involves a $35 million payout to 15,000 New York City baristas and shift workers, who accused the company of denying them stable schedules and arbitrarily cutting their work hours. The total amount of the settlement has been set at $38.9 million, but $3.4 million is expected to go towards the department managing the case as civil penalties. “We support the intent of the law and remain committed to compliance, but its complexity creates real-world challenges,” Starbucks said in a statement to the BBC.
For every week that employees worked between July 4, 2021, and July 7, 2024, workers will receive a $50 contribution. In addition to the payout, the company has also vowed to improve its scheduling practices to align with New York’s Fair Workweek Law to ensure no similar allegations are levied in the future.
How Was Starbucks in Violation of the Fair Workweek Law?
The New York City Department of Consumer and Worker Protection (DCWP) launched the investigation into Starbucks back in 2022, after it received a substantial number of complaints. The departmental investigations unveiled “a pattern of systemic violations” of the city laws, with accusations against the company of having broken the laws over half a million times since 2021.
The New York Fair Workweek Law has been in place since 2017, mandating early notification of worker shifts at least 14 days in advance. On failing to do so, companies are expected to pay a premium to compensate. These local regulations govern the rights of fast food workers, ensuring that they are given “regular schedules that stay the same week-to-week.”
It allows workers to follow a predictable schedule and offers them additional benefits when last-minute changes are made. The regulations also prevent workers from being unjustly fired or facing a dramatic reduction in their work hours without a legitimate cause.
Speaking with regard to the Starbucks settlement, New York City Mayor Eric Adams said on Twitter/X, “It doesn’t matter how big your business is — if you violate our workers’ rights, you will pay the price.” He also explained that the landmark settlement will “put tens of millions of dollars back into the pockets of hard-working New Yorkers and reinforce every New Yorker’s right to a reliable schedule, full hours, and basic dignity.”
The Starbucks Barista Strike Continues Across the Country
While NYC Starbucks workers have won satisfactory compensation from the company coffers, other baristas continue to strike for additional benefits and rights. The barista strike began on November 13 and is expected to continue indefinitely into the holiday season. The Starbucks Workers United union began the strike as a way to demand better worker rights and a formal contract from the employer. The strike recently expanded to 120 cities, uniting workers to join the Red Cup Rebellion.
The coffee giant has provided no indication that business has been affected by the protest, suggesting instead that operations have resumed at locations where work had previously been halted. While the workers continue their protest in hopes of a better deal, matters falls to Starbucks to determine the next step.
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