Starbucks Forced Into $35M Settlement Over Claims It Cut Hours and Broke Workweek Laws

Starbucks has been pushed into a record settlement after New York City uncovered widespread worker protection violations across hundreds of its stores, forcing the coffee chain to pay out more than £28 million ($35.5 million) to thousands of underpaid and overworked baristas who said their hours were cut without warning and their schedules turned chaotic. The headline figure answers the central question simply. Starbucks has been held accountable.

Findings From the New York City Investigation

The case began with a wave of worker complaints that poured into the New York City Department of Consumer and Worker Protection in 2022. Baristas from several branches reported that their hours were repeatedly slashed with no notice and that their weekly schedules shifted so suddenly that it became impossible to plan childcare, education or second jobs.

Investigators soon realised the problem was not limited to a handful of stores. The probe expanded to more than 300 locations across the city. What they uncovered was staggering. Officials said Starbucks violated fair workweek laws more than 500,000 times since 2021. Employees said their hours were routinely reduced by more than 15% and they were often denied the chance to pick up additional shifts.

The lack of consistent hours forced many baristas into involuntary part time work, with some reporting that their weekly earnings were so unpredictable that they struggled to budget for rent and basic bills. For the Adams administration, the scale of the violations made this case unlike anything the city had previously handled.

Details of the Settlement and Worker Restitution

The settlement marks the largest worker protection agreement in New York City history. Starbucks will pay more than £28 million ($35.5 million) in restitution to over 15,000 workers. A further £2.4 million ($3 million) will be paid in fines.

Under the terms, most hourly Starbucks employees who worked in the city between July 2021 and July 2024 will receive £39 ($50) for every week worked in that period. Baristas who lost their jobs during recent store closures will also be guaranteed a chance for reinstatement at other Starbucks branches.

For many workers, the payout represents both relief and a symbolic victory. Barista Kai Fritz said the settlement showed what happened when baristas stood together and refused to stay silent. Fritz said the fight would continue until employees secured a fair contract with stronger protections.

Starbucks' Official Response to the Violations

Starbucks said that the city's Fair Workweek law was challenging to navigate and that the violations were a matter of compliance, not deliberate wage theft. The company insisted that it did not withhold pay from employees and that many retailers in New York faced the same scheduling obstacles.

Mayor Eric Adams offered a sharper view. He said the case proved that no company was too large to face consequences and that workers deserved predictable schedules and proper treatment. The city vowed to continue enforcing labour laws and to push for reliable hours across all industries.

The investigation also found that Starbucks created scheduling chaos by failing to give staff regular hours, cutting shifts without notice and refusing to offer extra hours to workers who wanted them. These findings cut at the heart of the company's public promise to support its staff.

Broader Impact on Labour Rights and Scheduling Laws

The settlement comes at a tense time for the coffee chain. Workers across dozens of Starbucks locations are still engaged in a nationwide strike over working conditions and union recognition. The company is also facing a separate lawsuit from shareholders who say Starbucks misled investors about declining sales in the United States and China.

The shareholder complaint alleges that the company publicly celebrated its reinvention plan while privately concealing the strain placed on staffing and scheduling. When the truth became clear, Starbucks shares dropped sharply.