Starbucks Agrees to Pay $35m to New York City Workers in Landmark Labour Settlement

Starbucks has agreed to pay more than $35 million to thousands of its New York City workers following a major settlement over claims that the company repeatedly violated local labour laws by cutting hours and failing to provide predictable schedules.

City officials said over 15,000 hourly employees will receive $50 for every week worked between July 2021 and July 2024. The payout follows a wide-ranging investigation that began in 2022 after dozens of workers lodged complaints about erratic scheduling and reduced hours.

According to the New York City Department of Consumer and Worker Protection, the probe uncovered what it described as “a pattern of systemic violations” of the city’s Fair Workweek Law—legislation designed to give fast-food workers stable schedules and the chance to take on additional shifts. Authorities said the company violated the law more than half a million times, making this the largest worker-protection settlement in the city’s history.

Commissioner Vilda Vera Mayuga said the agreement reinforces the city’s stance on protecting workers’ rights. “All workers deserve dignity,” she said, adding that the settlement sends a strong message to corporations operating in New York City.

Under the settlement terms, Starbucks must also comply fully with all local worker-protection requirements going forward. The company, which described the rules as “complex”, said the compensation is tied to legal compliance rather than unpaid wages. Starbucks added that it remains committed to following all laws and recently announced plans to invest $500 million in staffing and training improvements across its cafes.

Mayor Eric Adams lauded the agreement, calling it a “landmark settlement” that will return tens of millions of dollars to workers and reinforce their right to stable hours and fair treatment.

The payout comes at a time when Starbucks is grappling with a nationwide push from employees demanding better pay, reliable schedules, and safer staffing levels. The Starbucks Workers United union, which has organised employees in roughly 5% of the company’s U.S. stores, has been engaged in a lengthy standoff with the coffee chain over unresolved labour complaints.

The dispute escalated last month when workers across more than 120 stores in 85 cities staged a strike, accusing the company of understaffing, reducing hours, and undermining union efforts.

Union leaders welcomed the city’s settlement as a victory but said the walkouts will continue until Starbucks agrees to a fair labour contract. “This settlement is a step in the right direction,” said union barista Kai Fritz, who argued that scheduling cuts and staff shortages make it harder to deliver quality service.

Workers United International President Lynne Fox said thousands of baristas nationwide remain on strike, pushing for stronger job protections, higher pay, and more consistent staffing. “For too long, Starbucks has acted with impunity,” she said, adding that the settlement shows why stronger protections are needed.

The settlement arrives as Starbucks, under chief executive Brian Niccol, works to revive its brand amid sluggish U.S. sales growth, rising competition, and customer frustration over pricing. Despite a slight uptick in global sales last quarter, challenges remain as the company attempts to navigate ongoing labour tensions while trying to win back customers with faster service and a renewed café experience.