Why Did Starbucks Violate New York City's Predictive Scheduling Law?

Starbucks has agreed to a $39 million settlement with New York City for widespread violations of the city's Fair Workweek Law, highlighting the significant compliance challenges that predictive scheduling regulations pose for employers. This landmark case reinforces that violations can result in substantial financial penalties and underscores the critical need for robust scheduling systems and processes.

What is New York City’s Fair Workweek Law? The Fair Workweek Law is a predictive scheduling regulation designed to provide stability for workers in the fast-food and retail industries. For covered employers like Starbucks, the law mandates several key requirements to ensure predictable work schedules. These include providing new hires with a good-faith estimate of their work schedule, posting work schedules at least 14 days in advance, and obtaining an employee's written consent for any subsequent changes. A central feature is predictability pay, which is premium pay owed to employees for last-minute schedule changes, such as adding hours without notice or canceling a scheduled shift. The law also includes provisions like the right to decline changes made without sufficient notice and a mandate to offer available shifts to current employees before hiring new staff. Similar laws are active in jurisdictions like Chicago, San Francisco, and Seattle.

How Did Starbucks Violate the Predictive Scheduling Law? According to city officials, Starbucks violated the law more than half a million times since 2021. The specific violations identified provide a clear lesson in compliance pitfalls. The City found that Starbucks failed to provide employees with regular, predictable schedules. A major issue was the unlawful reduction of employees' work hours without obtaining their explicit consent. Furthermore, the company was cited for failing to offer available shifts to its current employees before hiring new workers, a direct violation of the "right to more hours" provision. These systematic failures led to a settlement that includes $35.5 million in restitution payments to approximately 15,000 affected workers, with individual payments ranging from $50 to $3,900, plus an additional $3.4 million in civil penalties.

What Are the Challenges of Complying with Predictive Scheduling Laws? While supporting the law's intent, Starbucks and industry groups point to the practical difficulties of compliance. The law's complexity creates operational challenges in dynamic environments like retail and food service. For example, as Starbucks noted, if an employee who typically works 20 hours calls out sick and a manager finds a replacement, that act of covering the shift could be interpreted as a schedule change requiring predictability pay. The company stated, "The law treats almost an y adjustment as a potential issue – even starting a shift two hours later than planned, even if the total hours and pay stay the same." This sentiment is echoed by industry representatives. Kevin Dugan of the New York State Restaurant Association called the law "notoriously complex and difficult for restaurant operators to comply with, even when trying in good faith," citing the challenge of balancing consistent schedules with unforeseen absences and fluctuating business demands.

What Should Employers Do to Ensure Compliance? Based on the lessons from this settlement, employers subject to predictive scheduling laws must take proactive steps. Invest in advanced scheduling software that is programmed to comply with local regulations, automating notice requirements and tracking consent for changes. Provide comprehensive training for managers on the specific requirements of the law, with a focus on what constitutes a schedule change and when predictability pay is triggered. Establish a clear, documented process for offering extra shifts to existing employees before recruiting externally. Finally, conduct regular internal audits of scheduling practices to identify and correct potential violations before they lead to penalties. Proactive compliance is not just a legal necessity but a key component of positive employee relations and a strong employer brand.

The Starbucks settlement serves as a stark reminder of the financial and reputational risks of non-compliance. For employers, the key takeaway is that investing in compliant scheduling systems and manager training is essential to avoid costly violations. For workers, the case reinforces the importance of understanding their rights to a predictable schedule.