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Chipotle to pay $20 million to resolve New York City workplace case

The settlement — the largest of its kind in the United States — means cash payments for 13,000 current and former workers tied to alleged scheduling and sick leave violations

New York City has reached a $20 million settlement with Chipotle Mexican Grill to resolve violations of worker protection laws. The deal affecting about 13,000 workers is the largest of its kind in the United States. (Andrew Kelly/Reuters)

Chipotle Mexican Grill has reached a $20 million settlement with New York City to resolve fair scheduling and sick leave violations affecting 13,000 current and former employees.

The deal — the largest of its kind in the United States, was announced Tuesday and affects anyone who worked for the fast-casual restaurant chain in the city from November 2017 to this past April. They are eligible for $50 for each week of work. Current employees will be sent checks, but those who left their positions before April 30 must file claims to collect. Chipotle also will pay $1 million in civil penalties.

New York Mayor Eric Adams said Chipotle violated the city’s Fair Workweek Law, which took effect in November 2017. The measure requires employers to give workers their schedules 14 days in advance and pay premiums for schedule changes or shifts with less than 11 hours of rest between. It also requires large employers including Chipotle to offer 56 hours of paid leave each year.

It is the largest fair workweek settlement in the nation and the biggest labor protection settlement in the city’s history, Adams said Tuesday.

In 2018, the New York City Department of Consumer and Worker Protection started an investigation of Chipotle’s labor practices, after complaints were filed by 160 Chipotle employees and the 32BJ Service Employees International Union (SEIU). The inquiry initially focused on Brooklyn locations over possible violations of the Fair Workweek Law, then expanded to encompass locations citywide in 2021 with nearly 600,000 alleged violations.

According to court filings, Chipotle capped workers at 24 hours of paid sick time. From November 2017 to September 2019, the chain maintained an irregular scheduling system where shifts varied each day or each week. To avoid paying the premium that the law requires, Chipotle created false documentations of “waivers,” the investigation found.

“This almost feels unreal. When you’re in the thick of it, like going to work each day and going through the motions, you think no one is paying attention,” said Chipotle worker Yeral Martinez in an SEIU statement. “But this settlement proves that we’re not invisible.”

Chipotle’s chief restaurant officer, Scott Boatwright, noted that the company had raised wages across the country last year and introduced new policies.

“We have implemented a number of compliance initiatives, including additional management resources and adding new and improved time keeping technology, to help our restaurants and we look forward to continuing to promote the goals of predictable scheduling and access to work hours for those who want them,” he said in a statement.

The company has come under scrutiny for its labor practices in the past. Last week, former workers in Augusta, Maine, filed a complaint with the National Labor Relations Board after Chipotle permanently closed their store in the middle of a unionization drive. But the chief corporate affairs officer, Laurie Schalow, attributed the decision to “ongoing staffing challenges.”

The lead organizer, Brandi McNease, told the Kennebec Journal that she was turned down for a position at another Chipotle location.

Meanwhile, a report by a private nonprofit advocacy group, National Consumers League, and 32BJ SEIU said that “working conditions at Chipotle drive away thousands of employees each year.” Last year, the turnover rate for hourly employees was 194 percent, meaning that a restaurant with 20 crew members in January had to hire 39 workers throughout the year to remain fully staffed.

It also alleged that serving food quickly was prioritized over adhering to safety protocols, such as changing gloves and washing hands. “Chipotle cannot adequately ensure food safety without addressing the underlying issue of staff turnover,” the authors wrote.

In response, Schalow told The Counter that said the company was “committed to a culture of food safety in our restaurants where employees are supported and heard.”

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