The strike, which affects approximately 13,000 workers, sends a message "that we will not stand by when workers' rights are violated," said Mayor Eric Adams in a statement.
According to the city, the settlement covered scheduling and sick leave violations from late November 2017 to late April of this year. According to the agreement, hourly Chipotle employees in New York City will receive $50 for each week worked during that time period. Employees who left the company before April 30 must file a claim to be compensated.
The city's Fair Workweek Law, enacted in 2017, requires fast-food employers to provide workers with their schedules at least two weeks in advance or pay a shift bonus.
Employers must also provide at least 11 hours of rest between shifts on consecutive days, or obtain written consent and pay an additional $100. Employers must also offer workers more shifts before hiring additional workers in order for them to earn a sustainable income.
Large employers, such as Chipotle, must provide up to 56 hours of paid sick leave per year under a separate city law.
Chipotle was accused by the city of violating all of these policies.
"We're pleased to have been able to resolve these issues," said Scott Boatwright, the company's chief restaurant officer. Mr. Boatwright went on to say that the company had made a number of changes to ensure compliance with the law, such as implementing new time-keeping technology, and that Chipotle was looking forward to "continuing to promote the goals of predictable scheduling and access to work hours for those who want them."
The city filed an initial legal complaint in the case in September 2019, involving a handful of Chipotle locations, and then expanded the case last year to include locations throughout the city. The city claimed at the time that the company owed workers more than $150 million for scheduling violations alone. Civil penalties, according to labor advocates, could far exceed that amount.
Chipotle will pay $1 million in civil penalties in addition to up to $20 million in compensation. According to a city spokeswoman, the settlement was the quickest way for workers to get relief.
The city said in a statement that under the scheduling law, it had closed more than 220 investigations and obtained nearly $3.4 million in fines and restitution, and that under the sick leave law, it had closed more than 2,300 investigations and obtained nearly $17 million in fines and restitution. Neither figure includes the Tuesday settlement.
According to a city spokeswoman, the city has filed over 135 formal complaints under the two laws, and many employers settle before the city can file a case.
Chipotle is under fire for its labor practices on multiple fronts. The Service Employees International Union's Local 32BJ, which helped spark the investigation at Chipotle by filing initial complaints in the case, is attempting to unionize Chipotle employees in the city.
Employees at Chipotle locations in Maine and Michigan have petitioned for union elections. The Maine store has been closed, which employees claim was in retaliation for the organizing effort. According to Chipotle, the closure was due to staffing issues and had "nothing to do with union activity."