Starbucks Is Latest to Expand Paid Leave Policy on Outbreak

(Bloomberg) -- Starbucks Corp. will expand emergency pay for staff affected by the coronavirus in its U.S. stores, the latest major company to adjust paid leave policies in response to the worsening outbreak.

The “catastrophe pay” will be available to employees, regardless of whether they are showing symptoms, for up to 14 days, the coffee chain said in a memo seen by Bloomberg News. Starbucks will also offer “additional pay replacement” for as much as 26 weeks to employees unable to return to work after that period, it said.

Starbucks joins Walmart Inc., Darden Restaurants and McDonald’s Corp. in rolling out policies aimed at allaying employee concerns about not showing up to work if they’re sick or fearful of catching the rapidly spreading virus and propagating it. The challenge is more acute in the restaurant and retail industries that rely heavily on workers to staff their stores, which can’t be done remotely.

Starbucks confirmed last week a barista in one of its Seattle stores had been diagnosed with Coronavirus and would self-quarantine at home. Staff that were in contact with that barista have already been told to stay at home and are receiving catastrophe pay.

Vulnerable Staff

Starbucks is making the financial support available to staff both diagnosed with the virus or who have been in prolonged contact with someone in stores or home who has. Starbucks will also allow more vulnerable staff, such as those above 60 years old, or those who are pregnant or have underlying health conditions, to pro-actively self quarantine at home as a precaution. They will also be eligible for the catastrophe pay with a doctor’s note.

The catastrophe pay is separate to existing sick pay, and applies to hourly staff. Starbucks has offered sick pay to all store staff since July 2018. Workers in stores are able to accrue paid sick time based on the number of hours worked at a rate of one hour of sick pay for every 30 hours worked.

Starbucks shares have fallen about 23% since shortly after Jan. 20, when the first U.S. virus case was reported. Since the outbreak, Starbucks has taken other temporary measures in stores including additional cleaning procedures and increased investments in additional labor to assist in sanitation.

To contact the reporter on this story: Ed Ludlow in San Francisco at eludlow2@bloomberg.net

To contact the editors responsible for this story: Danielle Culbertson at dculbertson2@bloomberg.net, Sally Bakewell, Jonathan Roeder

©2020 Bloomberg L.P.