Starbucks to create $150,000 restitution fund for all New York City employees whose
Paid Safe and Sick Leave rights they violated and promote public education about the Law
New York State Attorney General Letitia James, Mayor Bill De Blasio, and Department of Consumer and Worker Protection (DCWP) Commissioner Lorelei Salas announced a settlement with Starbucks, to resolve violations of the New York City Paid Safe and Sick Leave Law.
A lengthy joint investigation that included multiple subpoenas, review of records, and interviews with Starbucks workers, found that Starbucks had an illegal sick leave policy that required employees to find a substitute when they used sick leave and that if an employee failed to find that substitute, it could result in “corrective action, up to and including termination of employment.” During the investigation, Starbucks corrected its policy and is now compliant with the Paid Safe and Sick Leave Law. The settlement requires Starbucks to pay restitution to current and former employees who were impacted by its illegal sick leave policy, to post an educational poster about Paid Safe and Sick Leave in all New York City stores, to notify all current New York City employees that they are covered by the City’s Law and are not required to find a replacement worker to use sick leave, and to submit a compliance report.
“Workers in New York City are entitled to paid sick leave. This settlement should serve as a notice to all employers in New York City that we will always prioritize the rights of workers,” said Attorney General James. “I am confident in the steps that Starbucks has taken to correct their actions, and I thank the Department of Consumer and Worker Protection for their partnership on this important issue.”
“In New York City, no corporation is above the law,” said Mayor Bill de Blasio. “In partnership with Attorney General James, the Department of Consumer and Worker Protection found widespread violations of our Paid Safe and Sick Leave law, and thanks to their investigation, workers will now be able enjoy the rights they are entitled to and get the restitution they are owed.”
“It is frustrating that a major corporation like Starbucks with over 8,000 employees in New York City had an illegal sick leave policy to begin with,” said DCWP Commissioner Lorelei Salas. “But we appreciate that they corrected the policy, have agreed to compensate the employers who were negatively affected, and will be taking additional steps to help ensure all New Yorkers know about their rights. New York is committed to protecting workers and we want this case to be a message to all employers: no one is above the law. We will pursue any employer that violates their workers’ rights.”
Under the settlement, Starbucks must:
- Pay restitution to affected workers.o Starbucks must hire a third-party claims administrator to create and maintain a restitution fund for any current or former covered employees. Covered employees worked 80 hours or more at Starbucks stores in New York City between January 1, 2015 and December 31, 2016 and were required to find a replacement in order to use sick leave and/or were disciplined for not finding a replacement to use sick leave. In the upcoming months, Starbucks must retain the independent claims administrator and notify all covered employees about submitting a claim for restitution. Employees will have 90 days from the mailing of the initial notice to submit a claim. Starbucks must make an initial payment of $150,000 to the fund but if funds are exhausted, it is responsible for any unpaid claims.o Starbucks must also pay $26,000 in restitution to DCWP, which will distribute to 23 workers identified during the investigation.
- Post an educational poster about the NYC Paid Safe and Sick Leave Law in all of its New York City stores. The posters must be posted within 45 days in a prominent, public location where all workers and customers can easily see it.
- Distribute a plain language notice about its sick leave policy to all current employees. The notice must state that they are covered by the NYC Paid Safe and Sick Leave Law and are not required to search for or find a replacement worker to use sick leave.
- Maintain a compliant sick leave policy and submit a compliance report to DCWP and the AG within six months. Any future violations will be subject to increased fines.
Under New York City’s Paid Safe and Sick Leave Law, employers with five or more employees who work more than 80 hours per calendar year in New York City must provide paid safe and sick leave to employees. Employers with fewer than five employees must provide unpaid safe and sick leave. All covered employers are required to provide their employees with the Notice of Employee of Rights that includes information in English and, if available on the DCWP website, the employee’s primary language. Employers must provide the notice on the first day of an employee’s employment. Employers must have a written sick leave policy that meets or exceeds the requirements of the Law.
Safe and sick leave is accrued at a rate of one hour of leave for every 30 hours worked, up to 40 hours per calendar year, and begins on the employee’s first day of employment. Employees can begin using accrued leave 120 days after their first day of work. For employers who do not frontload safe and sick leave on the first day of a new calendar year, employees must be able to carry over up to 40 hours of unused safe and sick leave from one calendar year to the new calendar year.
If the need to use sick leave is foreseeable, employers can require up to seven days advance notice to use safe or sick leave. If the need is unforeseeable, employers may require notice as soon as practicable. Employers can require reasonable documentation for more than three consecutive workdays as safe or sick leave but it is illegal to require that documentation specify the reason for using safe or sick leave. Employers may not engage in or threaten retaliation against employees, which includes firing and any act that punishes an employee for or is likely to deter an employee from exercising his or her rights under the Law.
Employers and employees can visit nyc.gov/workers or call 311 (212-NEW-YORK outside NYC) for more information including the required Notice of Employee Rights, one-page overviews for employers and employees, and the complaint form. DCWP also developed tools to help employers keep track of employees’ hours worked and safe and sick leave used, as well as model forms for verification of authorized safe and sick time used, safe and sick time.
