Starbucks increases parental leave for employees

NORTH AMERICA – Multinational coffeehouse and roaster chain Starbucks has announced it is increasing paid leave time offered to workers from 6 weeks to 18 weeks to improve its reputation as an employer.

Starbucks has expanded its parental leave benefits, now offering 12 weeks of paid leave to adoptive and long-term foster parents, doubling the previous six-week policy.

The enhanced benefit applies to employees working more than 20 hours per week.

This move reflects Starbucks’ commitment to maintaining its reputation as an industry leader in employee benefits, a reputation that CEO Brian Niccol noted is integral to the brand’s ongoing reinvention.

The change was prompted by employee feedback indicating that the earlier six-week program was insufficient.

CFO Rachel Ruggeri highlighted that expanding average weekly hours has helped lower turnover, reduce training costs, and increase employee pay—further aligning with the company’s focus on retaining talent.

While many franchised competitors do not directly manage benefits for hourly frontline workers, Starbucks remains one of the few company-operated brands to offer comprehensive benefits.

For example, Chipotle provides 12 weeks of maternal leave but only four weeks for paternal leave. The expanded parental benefits could aid Starbucks in retaining its workforce and repairing its brand image, which has been affected by prolonged disputes with unionized employees.

The chain faced additional challenges beginning in November 2023, including a decline in traffic from occasional customers.

Former CEO Laxman Narasimhan attributed this to “misperceptions” surrounding the company’s stance on the Israel-Hamas conflict.

Narasimhan emphasized Starbucks’ condemnation of violence against innocents, hate, and weaponized speech, stating that the company remains focused on supporting its employees and other affected stakeholders.

The conflict also impacted traffic and sales in the region, prompting Starbucks to collaborate with licensees to prioritize the safety and well-being of employees and customers.

During the labor shortages of 2021 and 2022, Starbucks, like many brands, introduced higher pay and additional benefits.

However, after the Starbucks Workers United campaign expanded beyond Buffalo, New York, unions and federal regulators accused the company of using these benefits as a tool to discourage unionization.

As labor market pressures ease, Starbucks is negotiating store-by-store contracts with Starbucks Workers United, a process that could redefine benefits for thousands of employees.

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