Starbucks Corporation (NASDAQ:SBUX) has agreed to a $38 million settlement with New York City over allegations of violating the city’s labor laws.

Major Penalty For Fair Workweek Breach

On Monday, New York City Mayor Eric Adams announced the settlement, which stems from a probe by the NYC Department of Consumer and Worker Protection into Starbucks’ alleged violation of the city’s Fair Workweek Law over 500,000 times since 2021. This is the biggest worker-protection settlement in the city's history.

Starbucks has agreed to pay $35 million to more than 15,000 New York City baristas who reported erratic schedules and unexplained cuts in work hours. The company will also provide about $3.4 million in civil penalties to the city.

Mayor Adams emphasized, “It doesn’t matter how big your business is, if you violate our workers’ rights, you will pay the price.”

Starbucks violated the Fair Workweek Law and thousands of employees were denied predictable schedules and additional shifts they had a right to.Thanks to our work, they're able to get some money back.It doesn't matter how big your business is, if you violate our workers'…

— Mayor ...