Starbucks is aiming to cut costs by cutting back on employee hours and raising pay for workers in its shops and company headquarters, but critics are accusing the company of trying to get away with playing down its excessive hours policy.
The company’s new policy states that stores will no longer be allowed to offer employees a maximum of 29 hours a week. Starbucks will phase out the traditional policy of offering a single standard day off for every 23 hours worked, and also end hour restrictions for holiday leave. The policy of putting employees on maximum hours is one of the main ways a business tries to reduce labor costs and entice workers to work longer hours.
The Seattle-based chain is looking to reduce its baristas’ hours by four hours per week, but aims to raise minimum wages for U.S. employees. According to the Wall Street Journal, U.S. Starbucks will raise minimum wages to $15 an hour by 2021. The news has many hoping that the company is finally acknowledging how hard it is to find workers at its U.S. stores.
However, the decision to lift minimum pay levels may not be enough to make up for the lower hours workers are working.
According to Business Insider, the company is facing a shortage of 80,000 workers in the U.S., which has forced it to slash hours for existing employees. At Starbucks, many workers are also required to work extra days, hours or years to ensure they make the company’s minimum pay, and some women have even taken out second mortgages on their homes to help pay for their part-time jobs, with the extra earnings just not enough to get by, the website reports.
Starbucks is now planning to reform the way it hires workers so that it reduces the burden on employers, the company confirmed to USA Today. Instead of limiting the number of hours workers are allowed to work, the company will require employees to work an agreed amount of hours per week. This will allow employees to accumulate more hours, but also reduce how much firms will pay them for those hours.
“What that means for our customers, it gives them fresher and better service with more store partners on their shift, so obviously it’s always great for customers,” Starbucks’ CFO Scott Maw told USA Today.
So while employees will find their jobs more difficult to get, employers can make more money on overtime pay and other income earned by employees working longer hours. However, critics are still worried that Starbucks is only compromising on its workers’ salaries.
The company has denied that it is looking to play down the number of hours its workers work, and maintain the same level of pay for workers, so that it can appear as if it’s making the same changes.
The Huffington Post reported that Doug Turfe, Starbucks’ CEO for Canada, said the company has been in talks for months to reform its shift policies. The company started to move ahead with the plans earlier this year, but they were, according to Turfe, “challenged by some internal issues.”
However, Turfe maintained the “atmosphere around the internal business was actually in excellent spirits,” despite reports on employee morale at its stores throughout Canada. He cited internal company research that showed a 98 percent satisfaction rate for Starbucks workers.
Yet critics remain unconvinced by Turfe’s version of events.
“If they put the money into adding more hours instead of paying their employees less, more people would be working – people who, in addition to providing their friends and family with more lattes, could also provide much-needed employment to more men and women looking for work,” the online magazine ThinkProgress said.
“Maybe Starbucks wants to play down the part of employee shaming that’s thrown at female employees who don’t go along with their new hours requirements,” it added.
Starbucks will institute its new shifts policy at all its 7,500 stores in Canada and begin implementing it in the U.S. store network later this year.