clock menu more-arrow no yes mobile

Filed under:

Every Starbucks Employee in America Is Getting a Raise

The company also announced expanded sick leave and parental leave policies


U.S. corporations just got a big tax cut, and Starbucks is using some of its savings to boost worker benefits. The coffee giant announced this morning that all domestic employees, both hourly and salaried, are getting a pay raise; it’s also doling out company stock and expanding paid sick leave and parental leave.

Pay raises will take effect in April, and are in addition to the regularly scheduled annual raises employees have already received this year. Starbucks did not indicate how much the pay hikes will be, but says they ”will be allocated based on regional cost of living and laws that vary from state to state.” It will also dole out stock grants of at least $500 to all employees at its stores, plants, and support centers who worked for the company as of January 1, 2018.

Other major corporations including Apple, AT&T, and American Airlines also announced pay and/or benefit boosts following the passage of Trump’s tax overhaul, which was aimed at simplifying the tax code for businesses and giving some taxpayers a tax break. Per Reuters, Credit Suisse analyst Jason West estimates that the new tax bill could save Starbucks around $425 million annually. The coffee giant says these raises and benefit boosts are worth a combined $250 million, and will benefit approximately 150,000 employees.

Starbucks is the first big name in the food and beverage space to announce raises and benefit increases in the wake of the most recent tax bill. (It’s worth noting that only companies that don’t franchise, including Chipotle and Shake Shack, are able to establish company-wide pay scales. For franchised corporations like McDonald’s, each franchisee sets wages for each of their employees.)

The new sick day policy enables Starbucks employees to accrue paid sick time based on hours worked. Staffers — which the company calls “partners” — earn one hour of paid sick time for every 30 hours worked. A release explains that this is intended to standardize paid sick time nationwide, and is “designed to match or exceed the benefits some partners are already receiving per recent changes to state and local government requirements.”

Meanwhile, Starbucks’ parental leave policy has been expanded to give non-birth parents up to six weeks of paid leave. The company already offers 16 weeks of paid leave to new mothers and 12 weeks to new fathers and adoptive parents in corporate positions, and six weeks of paid leave to new birth mothers employed at its stores. Critics question why Starbucks doesn’t offer the same amount of paid leave to both its corporate and in-store employees. A company representative says this is because based on employee surveys, more staffers wanted paid sick days than paid parental leave. Of note: The U.S. is the only industrialized nation in the world to not require companies to provide workers with paid parental leave.

Starbucks also says it has no immediate plans to raise drink prices at this time.

Starbucks Announces New Investments in Paid Leave, Wage [Starbucks Newsroom]
Starbucks to Boost Pay, Benefits After U.S. Lowers Corporate Taxes [Reuters]