A Starbucks seasonal coffee cup. 2023 press photo by Starbucks.
[Note: This story has been updated since its original publication. In now includes statements shared with DCN by a Starbucks representative regarding the extension of new employee incentives to unionized employees.]
In a move likely to reverberate through the coffee retail industry, Seattle-based coffee giant Starbucks said it is raising retail worker pay by a minimum of 3% beginning Jan. 1, while expanding other benefits, such as vacation accrual and financial wellness tools.
In an announcement today, the company also said it is launching a “North America Barista Championship,” which will be available only to employees in the United States and Canada.
The company said the new employee wage and benefits incentive package is part of an ongoing investment of more than $1 billion since last year to improve employee and store experiences. The investment was announced after the temporary reappointment of Howard Schultz as Starbucks’ CEO and continues now under the leadership of current CEO Laxman Narasimhan.
The continued investment comes as Starbucks remains at the center of the barista unionization push in the United States. Employees at more than 300 of the company’s 9,000+ company-owned stores are unionized, according to an analysis of recent National Labor Relations board documents.
Last year, the company raised its minimum wage for all hourly U.S. retail workers to $15, which is incidentally 74 cents below the current minimum wage in Starbucks’ home state of Washington.
A Starbucks drink. Stock photo.
A federal Administrative Law Judge (ALJ) recently ruled that the company violated federal labor laws when it made the company-wide minimum wage increase in 2022 but did not extend it to unionized baristas.
The company has previously maintained in court that unilaterally extending wage and benefits increases to unionized employees would actually run afoul of the National Labor Relations Act (NLRA) by bypassing union contract negotiations, creating an “untenable situation.” Notably, contract negotiations, or lack thereof, between Starbucks and union representatives at more than 300 locations have yet to result in a single ratified contract.
A Starbucks representative told DCN via email today that some of the benefits and improvements outlined in the company’s announcement today — including new scheduling protocols, as well as improvements related to the “Partner App,” initially unveiled in May 22 — will be available to all hourly retail employees regardless of unionization status.
The representative further wrote that, “All union represented stores will receive annual wage increases consistent with recent years’ raises.”
However, the representative noted that certain new incentives — including a 5% raise for employees with 5+ years of experience, and a shortening of the period before which new employees can begin accruing vacation time — fall under the “mandatory subject of collective bargaining under the NLRA,” and are thus not being extended to employees engaged in union negotiations.
The company announced today that, in addition to the continued $15 wage floor, all “eligible” current hourly workers will receive a minimum 3% pay raise beginning in the new year. Eligible employees with two to five years of experience will receive a minimum 4% pay raise, while eligible workers with five or more years of experience receive a minimum 5% raise.
Additional benefits to employees will include earlier-accruing vacation time, beginning 90 days after hire; an expansion of Starbucks’ existing college tuition plan in partnership with Arizona State University; financial planning tools; and options for more flexible shift scheduling.
The company is also introducing a new in-house barista competition, which it described as the “first-ever North America Barista Championship.” Starbucks previously introduced a United States barista championship, which was conducted in 2015 and 2016.
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Nick Brown Nick Brown is the editor of Daily Coffee News by Roast Magazine.
