Starbucks triples baristas’ paid parental leave to 18 weeks

Starbucks Corp. is boosting paid parental leave for in-store workers, part of management’s plan to boost employee morale and improve performance.

Starting in March, birth parents will receive 18 weeks of paid leave at 100% of their average pay, the company announced Monday. A parent who doesn’t give birth will get 12 weeks. Previously, the company offered retail workers six weeks of paid parental leave and as much as 12 weeks of unpaid leave.

Paid parental leave remains rare in the US, with only 40% of employers surveyed by the Society for Human Resource Management offering it this year. In 2023, just 16% of service workers had access to paid family leave, which includes time off to take care of newborns as well as other family members, according to the Bureau of Labor Statistics.

Chief Executive Officer Brian Niccol, who joined Starbucks earlier this year, has pledged to restart growth after three quarters of sales declines. He wants to serve customers faster and make stores more welcoming, and a key part of his plan involves improving the worker experience.

“We know when we invest in them, they deliver exceptional customer experience,” said Sara Kelly, who leads human resources at Starbucks. “What we are focused on is being the unrivaled best job in retail,” she added.

The change came about because of worker feedback, Kelly said. Non-birth parents include those who welcome a child that was born to a spouse, domestic partner or surrogate, for example. It also includes those who adopt or have long-term foster children.

Starbucks Workers United, the labor group representing about 5% of the company’s retail workers, said it brought up the company’s parental leave policies during bargaining last month. The two parties are in the process of negotiating the framework for a potential contract.

“For years, Starbucks gave corporate employees twice the amount of parental leave as retail employees,” said Michelle Eisen, a barista and union leader. “We are proud of this victory for all baristas.”

According to JUST Capital, which tracks and ranks corporate benefits, only 2% of retail companies that disclose their policies offer similar amounts of paid parental leave for the primary caregiver as Starbucks. The majority provide fewer than 12 weeks, JUST Capital said in an email. Niccol’s previous company, Chipotle Mexican Grill Inc., also gives store workers parental leave, though it offers less than the coffee chain.

Starbucks frequently touts its wages and benefits, including health insurance, college tuition and stock grants, among others. Part-time baristas working an average of 20 hours a week are eligible. Niccol, a seasoned restaurant executive, has vowed to fill 90% of retail leadership roles with internal candidates.

Baristas’ next round of pay increases will be smaller than last year’s, following weaker-than-expected financial results. The raises, which aren’t tied to individual performance, are based on market competitiveness and business results. Corporate workers are also feeling the impact, and will only get 60% of their bonuses.