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Starbucks has agreed to pay $38.9 million to settle claims by New York City that the coffee chain violated a local law requiring fast food businesses to give workers predictable and stable schedules more than half a million times over a three-year period, Mayor Eric Adams’ office said on Monday.
The settlement, which caps a three-year investigation by the city, is the largest involving a worker protection law in New York City’s history, Adams’ office said in a release.
Starbucks routinely failed to provide regular schedules to employees, cut workers’ scheduled hours without obtaining their written consent, and gave shifts to new hires without first offering them to existing employees, all in violation of a 2017 city law, according to a November 26 settlement agreement.
The settlement requires Starbucks to pay $35.5 million to more than 15,000 workers and $3.4 million in penalties and costs.
Starbucks in a statement said it supports the intent of New York City’s law but that complying with it is challenging. A company can violate the law, for example, if an employee calls out of a shift and another worker is asked to cover that time, Starbucks said.
“The law treats almost any adjustment as a potential issue – even starting a shift two hours later than planned, even if the total hours and pay stay the same,” the company said.
According to Adams’ office, affected workers will receive checks this winter and will be paid $50 for each week that they worked in an hourly position between July 4, 2021 and July 7, 2024.
New York City’s law was one of the first in the U.S. to limit “on-call scheduling,” a practice in which retail, fast food and other service businesses call workers in or cancel shifts with little notice. Oregon has adopted a similar law, along with Los Angeles, Chicago, San Francisco and several other U.S. cities.
Business groups have criticized the laws, saying they are unworkable and can lead businesses to cut jobs.
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Lisa Shumaker)
