Starbucks has agreed to pay over $35 million in a landmark settlement with New York City over allegations it illegally cut back thousands of workers' hours in violation of the city's Fair Workweek Law. 

The settlement announced Monday means Starbucks will pay restitution to more than 15,000 workers who were employed at hundreds of its New York City locations between July 2021 and July 2024. 

New York City officials touted it as the largest worker protection settlement in the city's history, coming on the heels of a strike by unionized Starbucks baristas. 

Starbucks accused of violating NYC workers' rights

The New York City Department of Consumer and Worker Protection said it launched an investigation into all 300+ Starbucks locations in the city in 2022 after it received dozens of worker complaints and ultimately uncovered more than half a million violations of the Fair Workweek Law dating back to 2021. 

The law limits how often fast food employers can change workers' regular schedules and says they must be given an opportunity to turn down additional hours. Additionally, it says active employees must be offered newly available shifts before hiring new workers. 

"The city's Fair Workweek Law provides workers with vital protections, like the right to a predictable schedule so workers can plan their lives and earn stable incomes, but Starbucks chose to ignore these rights and prioritize their own bottom line," said Vilda Vera Mayuga, commissioner of the New York City Department of Consumer and Worker Protection. 

Starbucks response

City investigators said most Starbucks employees never received regular schedules, and that the company regularly cut their hours by more than 15% while denying them chances to pick up extra shifts. 

"The NYC laws remain unchanged and complex, but our focus hasn't shifted – we're committed to creating the best job in retail. Since these claims, we've invested $500 million in improving the partner experience as part of our Back to Starbucks strategy. These investments not only ensure compliance – they make the experience better for partners in our coffeehouses. Today, more partners are getting schedules that fit their lives, making it easier to match availability and preferences while staying aligned with local laws like Fair Workweek," a Starbucks spokesperson said in a statement to CBS News New York. 

"It does not matter how big your business is or how much money your company makes, if you violate our workers' rights, you will pay the price," Mayor Eric Adams said.  

Mamdani backs Starbucks workers on strike

New York City Mayor-elect Zohran Mamdani addressed the settlement while joining striking Starbucks workers in Brooklyn. 

"We celebrate what [the Department of Consumer and Worker Protection] was able to accomplish in the largest ever settlement that has been won in this city," Mamdani said. "We will continue to commit funding, both of a fiscal kind and also of our own sustained commitments in terms of the political will necessary, to ensure that we hold these kinds of corporations accountable." 

How much money Starbucks employees will get

Starbucks will pay $3.4 million in civil penalties in addition to more than $35.5 million in restitution to workers in the settlement. 

Most hourly Starbucks employees will receive $50 for each week worked from July 4, 2021, to July 7, 2024, at more than 300 New York City locations, according to officials. 

An employee who worked continuously for a year and a half, for example, would be entitled to receive $3,900, city officials said.

Payments will arrive by checks in the mail during the winter, officials said.

Workers may be eligible to receive compensation for violations that occurred after July 7, 2024, by filing a complaint with the Department of Consumer and Worker Protection.