Walmart giving employees $1000 bonuses, raising minimum wage

Walmart giving employees $1000 bonuses, raising minimum wage

Walmart raises minimum hourly wage to $11 and offers cash bonuses on back of US tax reform

The starting wage rate increase, which is in addition to wage hikes already slated for many USA markets this coming fiscal year, applies to all US hourly associates, including those who work in stores, Sam's Clubs, the ecommerce division, logistics and the company's home office.

The company is offering a one-time bonus to full and part-time employees based on their length of service, rising to $1,000 for employees with 20 years of service.

The company said the changes are a way to allow workers to "share in tax savings". Salaried employees, who already had 10 weeks paid maternity leave, will receive more paid parental leave. (The company now offers six to eight weeks of partially paid maternity leave and no parental leave.) The Bentonville, Arkansas-based company will also offer adoption benefits for $5,000 per child to full-time hourly and salaried employees.

The retailer said Thursday that changes to its compensation and benefits policy will impact more than a million hourly workers in the U.S. The company employs 1.5 million people in the U.S.

The announcement comes after rival Target raised its hourly starting wage to $11 late previous year, with plans to increase it to $15 by 2020.

Walmart's announcement follows a series of similar moves by major corporations that also credited the tax cut with bolstering their businesses.

"Wal-Mart would have had to go to at least $11 in many markets in order to retain reliable employees", said University of MI business professor Erik Gordon.

While companies and states have increased salaries in recent years, the $7.25 federal minimum wage has not budged since 2009. The one-time bonus represents an additional payment to associates of approximately $400 million in the current fiscal year, which ends January 31, 2018.

Parental leave has been another area in which retailers including Target and Ikea have been trying to offer better benefits.

The move comes three years after Wal-Mart last announced it was raising wages, spending $1 billion in 2015 to lift starting hourly pay to $9 and then to $10 the following year - for workers who complete a 90-day training course. The idea is to reward employees who won't benefit from the new starting wage. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said.

Lately, much of the talk about Walmart's showdown with Amazon.com has centered on the old-school retailer building stronger e-commerce muscles.

Walmart is also increasing its paid leave policy for new fathers and non-birthing mothers to six weeks at full pay for full-time hourly workers. Walmart's online business is surging.

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