By Elias Schisgall
Starbucks will pay $38.9 million in restitution to employees and civil penalties following a settlement with New York City.
The global coffee chain will pay $35.5 million to more than 15,000 workers, along with $3.4 million in civil penalties and costs, the city said Monday.
The agreement comes after the Department of Consumer and Worker Protection found Starbucks had committed half a million violations of New York City's Fair Workweek Law since 2021.
Most New York City-based Starbucks employees who worked in an hourly position will receive $50 for each week worked between July 4, 2021 and July 7, 2024.
Starbucks said in a post on its blog that though it supports the intent of the city's law, its complexity creates real-world challenges.
"To move forward, Starbucks and DCWP have agreed on a settlement," the company said. "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."
DCWP's investigation, which began in 2022, found that Starbucks had unlawfully reduced employees' hours, denied them the opportunity to pick up additional shifts, and failed to give its employees regular schedules.
The city said it would be monitoring Starbucks' compliance with the law, including their obligation to provide reinstatement for employees at now-closed Starbucks locations.
Write to Elias Schisgall at elias.schisgall@wsj.com
(END) Dow Jones Newswires
12-01-25 1452ET
