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Starbucks to add sick time, higher pay for store workers

UPDATED: Wed., Jan. 24, 2018, 6:01 p.m.

The Starbucks logo on a shop in downtown Pittsburgh. (Associated Press)
The Starbucks logo on a shop in downtown Pittsburgh. (Associated Press)

SEATTLE – Starbucks will provide paid sick time to its employees nationwide and give its 150,000 hourly and salaried U.S. workers another wage hike in April, just three months after its regular January pay increase, the company announce Wednesday.

The Seattle-based coffee giant, which says the benefits expansion will cost $250 million in its first year, also will grant workers additional stock worth $500 to $2,000.

“Everyone is getting a raise – the level they get depends on the region and the cost of living,” said spokesman Reggie Borges.

Many U.S. companies have announced bonuses or wage increases since Congress last month reduced the corporate income tax to 21percent from 35 percent.

A tight labor market and rising minimum wages in many cities and states mean companies are under pressure anyhow to boost what they pay.

“For us the change in U.S. tax law has given us a chance to accelerate some of these long-term plans,” said Borges. “Historically we’ve always been a company that thinks of unique ways … to be appealing and attract the top talent.”

How much Starbucks will benefit from the tax cuts should become clearer Thursday when the company reports earnings for the first quarter of its 2018 fiscal year.

Starbucks also was under pressure from employees and others to improve some benefits. In June two baristas delivered to Starbucks headquarters a 30,000-signature petition urging that store employees receive the same parental leave as they would at the company’s corporate level.

Starbucks now is altering its store-level policy so fathers whose partners give birth also get six weeks with 100 percent pay. (Corporate-level employees get 12 weeks at 100 percent pay, plus another 6 weeks for birth moms.)

Some details of the new benefits:

Employees, or “partners” in Starbucks’ parlance, are credited with an hour of sick time for every 30 hours worked, so in a year “a partner working 25 hours a week can expect to accrue approximately five days of sick time benefit,” the company said. The time also can be used for the illness of a spouse or family member.

That benefit is estimated to cost the company about $30 million a year, Borges said.

The wage increases, which will cost Starbucks about $120 million a year, will be distributed based on regional market differences, said Borges. He could not provide an average wage increase.

All full- or part-time employees at Starbucks stores, plants and support centers working as of Jan.1 will get a stock grant – at least $500 for retail employees and $2,000 for store managers.

Starbucks CEO Kevin Johnson said the improvements help the company maintain its tradition of industry-leading benefits: “We were the first retailers to offer full health-care benefits to our partners – even those working part time, and more recently we revolutionized access to a tuition-free four-year degree for all partners.”


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