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Starbucks Offering Workers Catastrophe Pay During Coronavirus Outbreak

Starbucks (NASDAQ: SBUX) wants to avoid having its employees come to work if they may be infected with coronavirus. To make that happen, the company has introduced a new "catastrophe pay" plan to compensate its workers for any time misses.

What is Starbucks doing?

The chain has taken bold steps to curtail the spread of the virus. It sent a letter to its employees that explained how its new policy works, which was published in Nation's Restaurant News.

  • Any employee diagnosed with COVID-19 or who has has come into contact with someone diagnosed with COVID-19 should self-isolate and will get up to 14 days of full pay.
  • Any employee showing symptoms should self-isolate for 24 hours. After that, catastrophe pay can be used to cover three days away from work.
  • Employees over 60, pregnant workers, or those with underlying heart disease or lung disease issues are also eligible for the 14 days of catastrophe pay.

Starbucks is also allowing employees to use paid time off to cover any time missed related to coronavirus concerns, and will offer additional pay replacement if infected employees can't come back to work.

Starbucks CEO Kevin Johnson sometimes takes shifts in stores. Image source: Starbucks.

A difficult balance

Starbucks has a fine line to walk. It has to show that it takes the health of its workers and customers seriously while also trying to keep its stores open. These new policies should, in theory, keep employees from coming to work sick just because they can't afford to give up their paycheck.

So far, the company has not had any widespread closures in the U.S. That could change if the coronavirus continues to spread.

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Daniel B. Kline owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.


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