Starbucks Agrees to Pay Workers $38 Million to Settle Probe of Scheduling Practices

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Starbucks agreed to pay $38 million to settle an investigation by the city’s labor and consumer agency that found the coffee giant committed systemic violations of local scheduling laws at its New York City locations between 2021 and 2024, Mayor Eric Adams announced Monday.

A three-year probe by the city Department of Consumer and Worker Protection determined that Starbucks arbitrarily cut workers’ schedules and systematically denied employees the opportunity to pick up additional shifts, keeping them involuntarily part time. Most Starbucks workers in New York never received a regular schedule, in violation of the city’s Fair Workweek Law, which requires fast-food employers to assign schedules with 14 days’ notice.

The terms of the settlement reveal the breadth of the coffee giant’s violations of the law: Starbucks agreed to pay $35.5 million to approximately 15,000 people who were employed at one of more than 300 New York City locations from July 4, 2021, until July 7, 2024. The company also agreed to pay civil penalties totaling $3.4 million and to comply with the law going forward.

In all, the company violated the law more than half a million times since 2021, logging violations at all but one of its New York City locations — the Starbucks Reserve Roastery in Chelsea — according to DCWP official Elizabeth Wagoner.

Officials said it is the largest worker protection settlement in New York City history. 

Seattle-based Starbucks “systematically” violated the law because they “thought they could get away with it,” DCWP Commissioner Vilda Vera Mayuga told THE CITY.

“To workers: Understand that the government is on your side. DCWP is going to be looking into matters and getting the restitution that you deserve, and we’re going to be enforcing the law — it doesn’t matter how big a company is, if it’s a multibillion-dollar company,” Mayuga said. “We are committed to holding these companies accountable.”

In a blog post addressing the settlement Monday, the company described the city’s fast-food scheduling laws as “complex,” adding that employees’ requests for different shifts “makes compliance challenging.” Nonetheless, the statement read, “we take these requirements seriously.”

“To move forward, Starbucks and DCWP have agreed on a settlement. 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,” the company wrote in the unsigned blog post.

Starbucks’ failure to comply with the law illegally denied workers’ rights to stable and predictable schedules, as well as the opportunity to pick up additional shifts and earn more money. The company routinely unlawfully reduced workers’ schedules such that many did not know how much they would be paid week to week, officials said. The routine violations made it difficult for workers to plan commitments for child care, education and second jobs. 

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“This historic settlement marks a major victory for thousands of Starbucks baristas across New York City,” said Workers United-SEIU International President Lynne Fox, whose union represents some of the workers in the settlement. “For too long, Starbucks has acted with impunity: manipulating schedules, disrespecting workers, and ignoring legal protections put into place by New Yorkers to protect working people from unfair business practices.”

The DCWP launched its probe in response to dozens of worker complaints at several Starbucks locations beginning in 2022. The agency expanded its investigation to all Starbucks outposts citywide after uncovering evidence of systematic violations beyond the initial locations, based on worker reports and payroll data from the company, Mayuga told THE CITY.

The settlement comes as Starbucks workers across 85 cities nationwide including New York are in an ongoing strike, now in its third week, to protest the company’s alleged refusal to finalize a collective bargaining agreement with Starbucks Workers United. Wage and scheduling issues are among the sticking points for the union in New York and nationally.

In September, Starbucks announced plans to close hundreds of stores across North America, including 59 unionized locations, as part of a larger restructuring plan.

On Monday afternoon Mayor-elect Zohran Mamdani appeared at a Park Slope Starbucks Workers United picket line with U.S. Sen. Bernie Sanders (I-Vt.), briefly walking the line with striking workers. 

“Solidarity, as much as we speak of it, we have to remember is not an abstract concept,” Mamdani said, discussing the sacrifices made by striking Starbucks workers. 

“It is measured in picket lines stood on in the rain and in the sleet,” said Mamdani. “It is measured in rent payments workers do not know if they will be able to meet, child care bills they do not know whether they’ll be able to afford.”

Sanders thanked the Starbucks workers around the country for their courage.

“We are going to prevail,” he said. 

Kaari Harsila, 21, has worked for Starbucks for four years and most recently at a location in Clinton Hill. She said the inconsistent scheduling is one of many issues at her Starbucks, which also includes short-staffed stores. 

“We don’t have enough people quite frequently,” she said. “If one person calls out, best of luck to you. It’s just you and one other person then, you have to do the very best you can.”

She said she was happy about the settlement but that it doesn’t address major problems.

“I sure hope it gives Starbucks an awakening, that they recognize this is a real issue,” she said. “However that only covers to 2024, that doesn’t cover anybody that’s had these issues that are still persisting. For me, that doesn’t really help me much now.”

Current and former Starbucks employees who are covered under the terms of the settlement will automatically receive their restitution in the mail beginning this winter, Wagoner told THE CITY. Most employees who worked for Starbucks in hourly positions in New York City will receive $50 for each week worked between July 2021 and July 2024, a sum potentially totaling thousands of dollars. 

Workers who experienced a violation of the Fair Workweek Law after July 7, 2024, may also be eligible for compensation after filing a complaint with the DCWP.