Starbucks has agreed to pay over $35 million to thousands of its workers in New York City, addressing allegations related to labor law violations. The settlement comes at a period of deep discontent among workers. They have charged the coffee giant with failing to provide them regular schedules and arbitrarily reducing their work hours.
In 2022, New York City officials opened an investigation into Starbucks’ activities. They were addressing concerns that the company was not adhering to local law requiring increased work schedule predictability. Vilda Vera Mayuga, the former commissioner of the New York City Department of Consumer and Worker Protection, identified these types of alleged violations. She calls them the single biggest threat to workers citywide.
The settlement will directly benefit more than 15,000 hourly workers. Each worker will be paid $50 for each week that they worked during the period from July 2021 to July 2024. Starbucks pointed out that this pay isn’t back pay at all—this is pay for legal compliance, not recovered unpaid wages.
Starbucks Workers United, the union representing most of the employees affected, has been loudly and publicly calling for it. They are continuing to fight for better working conditions. In recent weeks, thousands of workers have left on strike, raising the level of their walkout to more than 120 stores in 85 cities. They are calling for a fair union contract that includes strong job protections, better staffing levels, and pay increases.
Starbucks, for its part, has a long road ahead as the labor turmoil grows. The company remains mired in a contentious, years-long labor dispute that threatens to sink its bid to win back previously disaffected customers. Chief Executive Brian Niccol, a former Taco Bell CEO, is steering the company through a turnaround to recapture lost customers. All this, they assure you, in their speedy service and return to their coffeehouse origins with ceramic mugs and hand-penned notes.
Starbucks is finally doing something about their problems. The company recently announced a $500 million investment — largely focused on staffing, wages and training — to improve care across its locations. Even with these attempts, the automotive giant’s sales numbers show a clear uphill climb. It only managed to report 1% same store sales growth at its global stores open at least a year, sales in the US was stagnant.
Starbucks faces an even stickier situation. It needs to reconcile its ambitious national expansion and robust brand reputation with the immediate needs of its workforce. The ongoing strikes, driven by calls for better pay and working conditions, underscore the tensions between management and staff that have persisted for years.