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Starbucks will distribute $35.5million to more than 15,000 New York City employees following a ruling that the company committed over 500,000 breaches of the city’s Fair Workweek Law.
Regulators also imposed $3.4million in civil penalties after determining that baristas across 300 stores did not receive predictable schedules or the opportunity to take additional shifts, leaving many stuck in part-time roles.
The New York City Department of Consumer and Worker Protection (DCWP) said most baristas will receive $50 for each week worked from July 2021 through July 2024. Workers who believe violations occurred after that period can still claim compensation by filing a complaint with the agency. The settlement also grants reinstatement rights for city workers laid off as a result of store closures.
The agreement is the largest worker protection settlement in New York City’s history and arrived hours before Mayor-elect Zohran Mamdani and US Senator Bernie Sanders appeared at a picket line outside a Starbucks site in Brooklyn.
Scheduling obligations defined by city law
The Fair Workweek Law requires fast food employers to issue regular schedules at least 14 days ahead of time, offer premium pay for changes, allow workers to decline additional hours and present existing staff with new shifts before hiring externally. Employers cannot schedule a “clopening” shift (a closing shift one night, followed by an opening shift the next morning) without written employee consent and a $100 premium. They are also barred from dismissing employees or cutting hours by more than 15% without just cause, and must rehire laid-off workers elsewhere in the city.
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DCWP Commissioner Vilda Vera Mayuga said: “The city’s Fair Workweek Law provides workers with vital protections, like the right to a predictable schedule so workers can plan their lives and earn stable incomes, but Starbucks chose to ignore these rights and prioritize their own bottom line. All workers deserve to be treated with dignity, and we are proud to stand up for our neighbors when a multibillion-dollar company like Starbucks chooses to systematically violate their employees’ rights.”
Compliance statement from the company
Starbucks said it intends to follow all local rules wherever it operates while noting the complexity of the Fair Workweek Law. The company pointed to situations in which even small employee-requested adjustments can generate a “domino effect” of required approvals and documentation.
“These violations are not about withholding wages or failing to pay partners, but as part of the agreement, some current and former partners will receive payouts. This compensation is about compliance, not unpaid wages,” the firm said.
Implications for ongoing labor dispute
Some three weeks into a strike organized by Starbucks Workers United, the agreement may create an opening for negotiations. The union is seeking improved hours to ease staffing issues, higher take-home pay and progress on hundreds of unresolved unfair labor practice allegations. The settlement could signify movement toward a broader resolution.
