Starbucks says it will give baristas bonuses

Starbucks $SBUX announced a performance-based bonus program for U.S. baristas and shift supervisors that could pay eligible workers up to $1,200 per year, or $300 per quarter, when their stores meet or exceed sales, operational, and customer service targets. Starbucks plans to launch the program in July, and workers who qualify will receive their first payments sometime this autumn.

The company also said it is expanding tipping to cover mobile orders placed through the Starbucks app and transactions where customers scan the app to pay at the register. Starbucks said that when expanded tipping options and bonus payments are considered together, total compensation for qualifying workers could increase by as much as eight percent.

Beginning in August, Starbucks will shift to weekly paychecks for its entire U.S. workforce — a change the company said it made after employees on biweekly pay schedules asked for more frequent pay.

Baristas at unionized locations are unlikely to see the bonus program right away. At approximately five percent of its U.S. locations where employees have union representation, Starbucks acknowledged that federal labor law requires the bonus program to go through the collective bargaining process before it can take effect. According to CNBC, the two sides have not made meaningful progress at the bargaining table in over a year; however, after Starbucks pushed in March to return to face-to-face sessions, a resumption of talks was anticipated before the end of the month.

The bonus program is part of CEO Brian Niccol's "Back to Starbucks" turnaround strategy, which centers on improving the in-store customer experience. The company said it has invested more than $500 million in additional staffing hours and expanded rosters since the strategy launched. In its most recent quarterly results, the company said U.S. customer traffic rose — the first time it has done so in two years.

Tension between the turnaround and labor relations has been a persistent backdrop. Starbucks Workers United has organized nearly 600 stores, and unionized baristas said the demands of the new service model — such as requirements to write personalized messages on cups — have added strain without commensurate pay increases. The company's cited figure of more than $30 per hour in total pay and benefits has been disputed by union workers, who say base wages at many locations remain closer to $15 per hour nationally.

Starbucks said the new incentive program reflects its commitment to offering competitive total compensation and that record-high retention rates and strong application volumes — more than 1 million annually in the U.S. — show the investments are being recognized by workers.