SBUX Starbucks Corporation

By Kimberly Chin

Starbucks Corp. (SBUX) has agreed to settle allegations with the New York State Attorney General and the New York City government that it had violated the city's paid safe and sick leave law.

The NYS Attorney General Letitia James said Starbucks had illegally required employees to find a substitute as a condition for using sick leave and if an employee failed to do so, they could have faced "corrective action," including potentially losing their jobs.

After the New York state and city government raised these claims, Starbucks changed its policy to be compliant with local laws, and it no longer requires employees to find a replacement worker when they call out sick.

"Once alerted to these claims made in 2016 by the New York City Department of Consumer Affairs, we clarified the policy in question shortly thereafter to and ensured we were in full compliance," a Starbucks spokesman said in an email.

The company has agreed to set up a $150,000 restitution fund for all current and former New York City employees who may have been affected by Starbucks' illegal sick leave policy between January 2015 and December 2015, Ms. James said. Starbucks has also agreed to post educational posters about the paid safe and sick leave law in all of its New York City stores and to inform workers of the law.

Starbucks will also pay $26,000 in restitution to the New York City Department of Consumer and Worker Protection. The agency will distribute the funds to 23 workers who were identified during the investigation.

Write to Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

December 19, 2019 14:54 ET (19:54 GMT)

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