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Starbucks Pledges to Not Cut Workers’ Benefits Under Obamacare

Starbucks CEO Howard Shultz told Reuters this week the company will not cut hours or benefits for employees — referred to as "partners" — in response to Obamacare.While many other large companies in the food service sector have said they will need to shift costs onto their workers in anticipation of upcoming changes under the health law, Starbucks says it will not follow suit.“Other companies have announced that they won’t provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours,” Shultz said. “But Starbucks will continue maintaining benefits for partners and won’t use the new law as an excuse to cut benefits or lower benefits for its workers.”

By Mike Hower | Published 11 years ago | About a 2 minute read

Starbucks CEO Howard Shultz told Reuters this week the company will not cut hours or benefits for employees — referred to as "partners" — in response to Obamacare.

While many other large companies in the food service sector have said they will need to shift costs onto their workers in anticipation of upcoming changes under the health law, Starbucks says it will not follow suit.

“Other companies have announced that they won’t provide coverage for spouses; others are lobbying for the cut-off to be at 40 hours,” Shultz said. “But Starbucks will continue maintaining benefits for partners and won’t use the new law as an excuse to cut benefits or lower benefits for its workers.”

Obamacare requires employers with 50 or more workers to provide basic health benefits to anyone who works at least 30 hours a week. If those large companies fail to offer some form of health coverage, and if their employees end up needing to rely on federal subsidies to get insurance in Obamacare’s marketplaces, they will face hefty fines.

Some CEOs have claimed that they cannot afford to offer their workers health coverage and will need to either slash workers’ hours below the 30-hour threshold or let some employees go.

Despite some claims that Obamacare will damper an already struggling economy, studies have shown that only a few employers are actually cutting workers’ hours due to the health reform law. Statistics show employers have been reducing benefits and attempting to shift costs onto their low-wage workers for years — Obamacare is only offering a good excuse.

Starbucks already goes well beyond Obamacare’s coverage requirement by providing health care to part-time employees who work at least 20 hours a week. While Shultz saysthe company spends more on health care than it does on coffee, he has always refused to cut his workers’ benefits.

Schultz also has been vocal about his company’s support for marriage equality and has suggested that opponents of same-sex marriage are free to sell their Starbucks stock. He also has been an ardent supporter of raising the minimum wage.

Starbucks has shown its commitment to ensuring the well-being of workers throughout its supply chain. In March, the company announced the expansion of its $70 million ethical sourcing program with a new farming research and development center in Costa Rica, part of its ongoing commitment to ethically sourcing 100 percent of its coffee by 2015. Besides supporting resiliency for farmers around the world, the agronomy center will also influence the development of coffee varietals based on the insight offered through soil management processes, which could offer significant advantage in the development of future blends.

Mike Hower

Founder & Principal Consultant, Hower Impact

Mike Hower is the founder of Hower Impact — a boutique consultancy delivering best-in-class strategic communication advisory and support for corporate sustainability, ESG and climate tech.

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