Starbucks to pay $39 million in NYC’s largest-ever worker protection settlement

New York City Mayor Eric Adams and the Department of Consumer and Worker Protection (DCWP) have announced a record $38.9 million settlement (around ₹350 crore) with Starbucks for widespread violations of the city  ’s Fair Workweek Law, the largest worker protection settlement in the city’s history.

According to New York’s government website, a multi-year DCWP investigation found that since 2021, the company committed over half a million violations, denying thousands of workers at more than 300 stores stable schedules, advance notice of shifts, and opportunities to pick up additional hours. 

Instead, schedules were cut arbitrarily, pushing many workers into involuntary part-time status while new staff were hired.

Under the agreement, Starbucks will pay more than $35.5 million in restitution to over 15,000 current and former employees, in addition to workers who come forward. The company will also pay $3.4 million in civil penalties and costs, and must comply with the Fair Workweek Law going forward.

Announcing the settlement on X, Mayor Adams said, “We’re not new to fighting on behalf of working-class families, we’re true to it.” 

“For years, we have stood with Starbucks workers, and today, our administration helped get them the pay and respect they deserve thanks to a historic $38 million settlement for working people — the largest worker protection settlement in NYC history,” he added.

DCWP launched its investigation in 2022 following dozens of worker complaints. Evidence gathered from hundreds of employees and internal Starbucks data revealed systemic violations across city stores, as per the statement.

The findings showed employees often received inconsistent schedules, experienced illegal hour cuts of over 15%, and were denied the right to take on newly available shifts.

Most hourly workers employed between July 4, 2021, and July 7, 2024, will receive $50 for every week worked.

The settlement also preserves workers’ rights related to layoffs following recent Starbucks store closures. Laid-off employees are entitled by law to reinstatement at other locations, and DCWP is monitoring compliance.