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Starbucks sharing tax cuts with employees

January 25, 2018

Starbucks Coffee Company is sharing its U.S. tax cuts with its employees, announcing Wednesday that they will receive higher wages, more time off and stock options.

The additions include more than $250 million for more than 150,000 employees — which Starbucks refers to as "partners" — and are accelerated by recent changes in the U.S. tax law, according to a company press release.  

"For more than 30 years, Starbucks has continued to challenge the status quo offering comprehensive employee compensation for our partners (employees)," Kevin Johnson, CEO of Starbucks. “We were one of the first retailers to offer full healthcare 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 with the Starbucks College Achievement Plan through our partnership with Arizona State University."

According to a benchmarking study Starbucks commissioned, performed by Aon, a global professional services firm providing a broad range of risk, retirement and health solutions, the benefits awarded to partners, who work 20 hours or more per week at Starbucks rank above any other retailer in the study and are three times more valuable than any other retailer in their study.

"Today, we are proud to announce additional investment in stock, wages and a new Partner and Family Sick Time benefit that will further enhance our industry-leading approach. Just as we have always felt strongly that our partners are key to our business success, we have also known offering a valuable, comprehensive benefits package helps us retain our valuable partners," Johnson said. 

Starbucks provided the following details regarding the investment decisions:

• Starbucks pays above the minimum wage in all states across the country. In April, all eligible U.S. hourly and salaried partners will receive a second wage increase in addition to the annual increases that they have already received this fiscal year. This will include an investment of approximately $120 million in wage increases that will be allocated based on regional cost of living and laws that vary from state to state.
•  On April 16, the company will provide an additional 2018 stock grant for all eligible full-time, part-time, hourly and salaried U.S. partners across our stores, plants and support centers, who have been active as of Jan. 1, 2018. All Starbucks retail partners will receive at least a $500 grant, store managers will each receive a $2,000 grant and plant and support center partner (non-retail) grants will vary depending on annualized salary or level. This investment alone is valued at more than $100 million.
• A new Partner and Family Sick Time benefit will be available to all eligible U.S. partners, which will allow partners to accrue paid sick time based on hours worked and then use them if they or a family member needs care. When this benefit goes into effect this year, Sick Time will accrue at a rate of one hour for every 30 hours worked, thus a partner working 23 hours a week can expect to accrue approximately five days of sick time benefit over the course of one year.
• Starbucks has also reaffirmed its commitment to create more than 8,000 new part-time and full-time retail jobs and an additional 500 manufacturing jobs in its Augusta, Georgia soluble coffee plant.
• For store partners, Starbucks has also expanded their parental leave policy to include all non-birth parents with up to six weeks of paid leave when welcoming a new child.
• These new offerings are in addition to the nearly $7 billion of capital that Starbucks will deploy to build and renovate stores, manufacturing plants and technology platforms in the U.S. over the next five years. Starbucks remains committed to providing opportunities to tens of thousands of Americans from disadvantaged backgrounds.
• Starbucks also remains committed in continuing to offer industry-leading comprehensive health care benefits and marketplace, disability and life insurance benefits, a 401K savings plan benefit and continue the Starbucks College Achievement Plan, which is a free tuition benefit offered to Starbucks partners together with Arizona State University.