Starbucks and New York City agree on historic $39 million worker settlement

Starbucks has agreed to a $38.9 million settlement with New York City following a multi-year investigation that found the company violated the citys Fair Workweek regulations, according to an announcement from the mayors office.

The Department of Consumer and Worker Protection (DCWP) determined that since 2021 the company committed more than 500,000 violations involving requirements for consistent and predictable scheduling across over 300 locations. City officials stated that this marks the largest worker-protection settlement ever reached in New York City.

City leaders emphasized that no company is exempt from following labor laws. They noted that the settlement will return tens of millions of dollars to employees and reinforce workers rights to stable hours and dependable scheduling.

The investigation began in 2022 after numerous employee complaints. Over the next three years, DCWP found that workers rarely received consistent schedules and that their hours were often cut by more than 15% in violation of city rules.

Under the terms of the settlement, Starbucks will provide over $35.5 million in restitution to roughly 15,000 affected employees, as well as to additional workers who come forward. Most hourly employees who worked in New York City between July 2021 and July 2024 will receive $50 for every week worked during that period, with potential payments approaching $8,000. The company must also pay $3.4 million in civil penalties and administrative costs.

Starbucks responded that the Fair Workweek Law contains complex requirements and stated that even minor scheduling adjustments can unintentionally trigger violations. Despite this, the company said it remains committed to complying with all regulations and improving workplace practices.

Starbucks is one of several major restaurant chains facing scrutiny under the Fair Workweek Law. Chipotle, for example, settled similar allegations in 2022 for $20 million after being accused of widespread scheduling and sick-leave violations.

The settlement comes amid heightened labor tensions between Starbucks and Workers United. Nationally, union actions expanded during the companys Red Cup Day event, and local elected leaders, including New York Citys mayor-elect and Sen. Bernie Sanders, have publicly joined workers on the picket line.

Author: Benjamin Carter