Today, Walmart announced plans to increase the starting wage rate for all hourly associates in the U.S.to $11, expand maternity and parental leave benefits and provide a one-time cash bonus for eligible associates of up to $1,000.
Since Wal-Mart's initial increase starting in 2015, many states have enacted minimum-wage laws, meaning that a "sizable group" of its 4,700 USA stores already pay $11 an hour, according to spokesman Kory Lundberg.
Walmart said that the one-time bonus will be given to all eligible full and part-time hourly USA employees. Walmart didn't explain exactly how the sliding scale will work, but said the total value of the bonuses will be $400 million.
The company is also creating a new benefit to assist employees with adoption expenses.
Walmart's CEO Doug McMillon said in a statement that the combined wage and benefit changes, which will benefit more than 1 million United States hourly associates, are a result of tax savings from this year's tax reform that reduced the country's corporate tax rate to 21%.
Wal-Mart's hike follows Target's October decision to increase its minimum hourly wage to $11, which it will further boost to $15 by the end of 2020.
The Republican plan cuts the corporate tax rate from 35 percent to 21 percent.
McMillon said Walmart is in the "early" stages of assessing opportunities from the GOP tax plan, adding "tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S". The bonus is based on length of service, with workers with at least 20 years qualifying for $1,000. The increase cut into profit and was criticized by some longer-tenured employees as unfair to them.
Previously, Walmart provided fully paid family leave to salaried workers, while hourly workers received half pay during family leave. Hourly workers will be paid between $11 and $24.70 an hour.
Walmart also said it would offer financial help to full-time hourly and salaried employees who are seeking to adopt children.
With this move, the world's largest private employer has scored big points with Republican politicians, who now have a talking point for the campaign trail, and maybe also from shoppers who see its wage increase as socially responsible.
An expanded parental and maternity leave policy, providing full-time hourly associates in the USA with 10 weeks of paid maternity leave and six weeks of paid parental leave. About a dozen banks have said they will raise their minimum wages.
Plus, Walmart knows from experience what raising wages can do to help boost business. It has done well and strengthened its hand in online retail as many other retailers have struggled.
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