NEW YORK -- Starbucks violated New York City's paid sick leave law by making ailing workers find substitutes or face possible discipline or even firing, officials said Thursday in announcing a settlement with the coffee chain.
The company has changed the policy and agreed to set up a $150,000 restitution fund for employees.
“In New York City, no corporation is above the law,” Mayor Bill de Blasio, a Democrat, said in a statement.
An investigation by the city and state Attorney General Letitia James's office found Starbucks told workers that if they couldn't get colleagues to fill in during sick time, “corrective action, up to and including termination of employment" could result, officials said.
Seattle-based Starbucks Corp. said it acted quickly once told of the claims in 2016.
“We clarified the policy in question shortly thereafter” and “ensured we were in full compliance,” spokesman Reggie Borges said. Starbucks also announced a new, companywide paid sick time policy last year.
Under city law, employers with over four workers generally have to provide up to 40 hours a year of paid sick time; the exact amount depends how much an employee works. Companies can require workers to give some notice but can't threaten punishment for using the time.
Starbucks has over 8,000 employees in New York City, and 23 workers were involved in the state and city investigation into its sick leave policy, officials said.
Those 23 will share in $26,000 in restitution; other employees who were forced to find replacements or disciplined for failing to do so can now submit claims to the $150,000 fund.
James, a Democrat, said she was “confident in the steps that Starbucks has taken to correct their actions.”
Starbucks has often positioned itself as progressive and worker-friendly, particularly about health care. It was one of the first U.S. companies to offer health insurance even to part-time employees.
Founder Howard Schultz has said he became passionate about workers' health care after seeing his father struggle to hold down several low-wage jobs, none of which offered health insurance, during his youth in New York City.
New York City's paid sick leave law took effect in 2014. The city says it has since obtained more than $11 million in fines and restitution for more than 35,000 workers.