ADVERTISEMENT

Starbucks Follows New Standard Set by Wal-Mart on Paid Leave

Starbucks Follows New Standard Set by Wal-Mart on Paid Leave

(Bloomberg) -- Less than two weeks after Wal-Mart Stores Inc. added paid family leave for all employees, Starbucks Corp. Wednesday expanded paid parental leave to most of its hourly workers and granted them paid sick days for the first time.

Starbucks’ new benefits, which affect about 150,000 workers, give non-birth parents up to six weeks paid time off for the first time. Like Wal-Mart, which is the largest private employer in the U.S., Starbucks also announced raises for employees on the heels of a U.S. corporate tax cut.

Starbucks Follows New Standard Set by Wal-Mart on Paid Leave

“Suddenly it seems like low-wage workers are a part of the discussion about paid family leave,” said Katie Bethell, executive director of Paid Leave for the U.S., an advocacy group that has been pushing employers to offer such benefits. “The baby of a CEO and the baby of a person working in a retail outlet -- they need the same amount of care.”

The tightening U.S. job market is forcing employers to work harder to attract and keep hourly workers. As the economy has improved, perks used to keep salaried staff are spreading to the broader workforce. Companies also are facing more pressure from state lawmakers, employee groups and parenting advocates to expand their safety net, along with new laws requiring mandatory changes.

Netflix Inc. expanded family leave benefits for its hourly workers in 2015. Only about 6 percent of U.S. low-income workers have access to paid parental leave, according to Paid Leave for the U.S.

“It’s not only competition for us, we want to be a leader,” said Ron Crawford, vice president of global benefits for Seattle-based Starbucks. “People stay with us because of these things.”

Sick Leave

In addition to parental time off, Starbucks said hourly workers will be eligible for paid sick leave to care for themselves or family -- accruing one hour for every 30 hours worked. The average Starbucks employee works about 23 hours a week, which would make them eligible for five days a year, the company said. Nine states, including California and Connecticut, have added mandatory sick leave since 2011, requiring three to five paid days a year.

At Wal-Mart, full-time hourly workers will receive 10 weeks of maternity leave at full pay. Fathers and partners will be eligible for six weeks paid. Part-time workers don’t get the same benefit. The company previously granted as many as eight weeks of maternity leave to hourly workers, but only at partial pay, and didn’t offer any benefit to dads, adoptive parents or same-sex couples.

Among private-sector workers, 68 percent had paid sick leave and 13 percent had paid family leave, according to the Bureau of Labor Statistics. For service workers, that falls to 46 percent for sick days and 7 percent for family leave, according to BLS data from March 2017.

Under the U.S. Family and Medical Leave Act, passed in 1993, companies with more than 50 employees have to allow employees 12 weeks of unpaid leave and protect their jobs. If the person has been in the job less than a year or the company has fewer than 50 people, there is no such requirement. The U.S. is the only industrialized country that doesn’t mandate paid leave for new parents.

With its new benefits policy, Starbucks “completely changes the calculus for companies that are competing with Wal-Mart for talent,” said Bethell. “We’ve been having a steady drumbeat of ‘This is unequal, this is unequal.’”

--With assistance from Jordyn Holman

To contact the reporters on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net, Leslie Patton in Chicago at lpatton5@bloomberg.net.

To contact the editors responsible for this story: Janet Paskin at jpaskin@bloomberg.net, Rob Golum, Nick Turner

©2018 Bloomberg L.P.