Starbucks to Pay NYC Workers $35 Million After Alleged Labor Law Violations

Starbucks has agreed to pay more than $35 million to over 15,000 hourly workers in New York City to settle claims that the company repeatedly violated the city’s labor laws by cutting hours and failing to provide predictable schedules. Under the agreement, workers will receive $50 for each week worked between July 2021 and July 2024.

New York City’s Department of Consumer and Worker Protection said its investigation uncovered more than half a million violations of the city’s Fair Workweek Law, which requires fast-food employers to offer stable scheduling and opportunities for extra shifts. Officials called it the largest worker-protection settlement in the city’s history.

The probe began in 2022 after dozens of employee complaints and later expanded to cover all Starbucks locations in the city. Commissioner Vilda Vera Mayuga said the settlement underscores that “all workers deserve to be treated with dignity,” accusing the company of systematically denying employees their rights.

Starbucks said it remains committed to complying with local laws and recently announced plans to invest $500 million to improve staffing and training. The company argued that New York’s worker-protection rules are “complex,” but said compensation will be paid to resolve compliance issues rather than unpaid wages.

The settlement comes as the U.S. coffee chain faces ongoing labor disputes nationwide. Starbucks Workers United, which has won union elections at roughly 5% of company-owned U.S. stores, continues to pressure the company over pay, staffing and scheduling. Strikes have expanded to more than 120 stores across 85 cities as workers push for a “fair union contract.”

The agreement marks another flashpoint in a years-long labor battle that has challenged the company’s turnaround efforts. Despite recent progress,  including a return to sales growth in its latest quarter, Starbucks is still grappling with customer backlash, rising competition and internal leadership shifts.