Starbucks settles New York probe into illegal sick leave policy

FILE PHOTO: A Starbucks Drive Thru logo is pictured on a building in Buffalo, New York April 14, 2016. REUTERS/Carlo Allegri

NEW YORK (Reuters) - Starbucks Corp agreed on Thursday to pay restitution and accept greater oversight to settle a multi-year probe finding that it had illegally required New York City employees to find substitutes when they needed to use sick leave.

The settlement with Starbucks, which has changed its sick leave policy, was announced by New York Attorney General Letitia James, New York City Mayor Bill De Blasio and the city’s consumer affairs commissioner, Lorelei Salas.

It requires the Seattle-based coffee chain to pay $176,000 in restitution to employees, a sum that could grow if exhausted, and prominently post educational posters about the city’s sick leave law in all city stores.

Starbucks must also clearly explain its sick leave policy in to its more than 8,000 New York City employees, and detail its compliance within six months to regulators.

The settlement runs three years and could be extended if Starbucks violates it.

Starbucks did not immediately respond to a request for comment.

Officials said Starbucks violated New York City’s Earned Safe and Sick Time Act from April 2014 to February 2016 by requiring employees to find replacements before using sick leave, or else face possible discipline including termination.

In January 2018, Starbucks adopted a nationwide policy granting employees one hour of sick leave for every 30 hours worked. That equates to roughly seven or eight days a year for a full-time employee.

“I am confident in the steps that Starbucks has taken to correct their actions,” James said in a statement.

Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky