Here's How Much Starbucks Is Planning To Increase Employee Pay
Starbucks baristas can expect to see larger paychecks in August as part of a broad set of changes that will be enacted this year. The chain made a vague announcement about this plan on July 11 in the form of a letter from interim CEO Howard Schulz. In the letter, Schulz explained the coffee chain plans to "reinvent" the company in five ways: re-envision, renew, reconnect, redesign, and reimagine. Just one day later how exactly Starbucks is planning to carry out this mission has been made more clear. According to Starbucks' Stories, upcoming initiatives include "faster sick time accrual," updates to the dress code that will work with tattoos and piercings, and "upskilling and career mobility programs."
However, there is some uncertainty involved. The wages section explicitly states that raises will only go to workers who were hired on or before May 2 and are "eligible." What makes a worker eligible is not stated in the document, instead, the text instructs readers to follow a QR code that leads to a May 3 statement in its fine print.
Which Starbucks workers can expect to be excluded?
According to Starbucks' Stories, Starbucks workers who are eligible will have their pay raised either to $15 per hour or by 3%, whichever is larger. Workers with two to five years of experience will see at least a 5% raise, while those who have been with the company for over five years will receive at least a 7% raise. Managers across the board will also receive double of what was supposed to be a one-time pay increase.
The May 3 Starbucks statement – which can be accessed by QR code from the new benefit announcement — explains that "eligible" may actually mean non-unionized employees, with the statement explaining the company believes it is unable to make any changes to things like pay, working conditions, or benefits without consulting the union. Interim CEO Howard Schulz reiterated this message, stating, "we do not have the same freedom to make these improvements at locations that have a union or where union organizing is underway," believing the law, "prohibits [Starbucks] from promising new wages and benefits at stores involved in union organizing," per CNN.
Starbucks doesn't have to offer these benefits to all employees, but it can
The question to be addressed is how accurate Starbucks' belief that federal law prohibits it from raising the wages of union workers actually is.
A similar question arose in 2017 when someone in a union negotiation contract wrote to the Southern Newspaper Publishers Association. The question was whether it was lawful to give non-union workers a raise while not doing the same for represented ones. The answer is that the U.S. Court of Appeals for the D.C. Circuit previously ruled that the employer can do so as long as they are not unlawfully motivated by an anti-union bias that extends beyond the fiscal realities of dealing with a union. "Likewise," it continued, "an employer is under no obligation under the act to make such wage increases applicable to union members, in the face of collective bargaining negotiations on their behalf involving much higher stakes."
So, Starbucks is under no obligation to raise union wages. However, the chain and current CEO Howard Shultz are mistaken that the law says unionized employees cannot be given these raises. Furthermore, as CNBC summarizes, although changes to pay and benefits have to be negotiated with a union representative, Starbucks can legally offer unionized employees increased pay — essentially, it cannot take anything away, but it is free to offer more.