Published: Fri, January 12, 2018
Markets | By Terence Owen

Walmart raises minimum wage, gives bonuses after tax cut

Walmart raises minimum wage, gives bonuses after tax cut

Walmart, the world's largest private employer, is boosting its starting salary for US workers to $11 an hour, giving a one-time cash bonus of up to $1,000 to eligible employees and expanding its maternity and parental leave benefits.

This is the third USA -wide minimum wage increase at the company since 2015 as it works to improve its 4,700 US stores while investing heavily to compete with Inc. online.

Walmart, which said the changes would take effect in mid-February, also plans to give one-time cash bonuses to some part-time and full-time workers, ranging from $250 (for workers who have been at Walmart for two to four years) to $1,000 (for those who have been working there for 20 or more years).

Dozens of other companies have announced worker bonuses following the passage of the Republican tax plan.

The increase for the nation's largest private employer also comes amid political pressure to bolster minimum wages and comes amid a hot streak for the retailer.

"We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders", said Doug McMillon, Walmart chief executive.

The retailer said on Thursday changes that to its compensation and benefits policy will impact more than a million hourly workers in the U.S., with the wage increase effective next month.

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Prior to Walmart's announcement, the total amount of bonuses pledged amounted to 0.09 percent of the value of the tax cuts to corporate America over 10 years.

He added that "tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S". Walmart said the one-time bonuses would cost the company $400 million and will be based on length of service. Paying workers more will help ensure those stores are pleasant shopping environments - a necessity for Walmart if it is to keep growing its sales. The change is in addition to wage increases already planned for many US markets in the coming fiscal year. Previously, birthing mothers got six to eight weeks at half pay.

Workers in Washington D.C. and the states of California, Washington and MA, already earn at least $11 an hour.

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

The expanded parental and maternity leave policy will provide full-time hourly associates with 10 weeks of paid maternity leave and six weeks of paid parental leave.

The raise will increase the average hourly pay at Walmart for full-time employees from $13.85 to $14.50.

Target announced it was raising its minimum wage to $11 last September and pledged to establish a $15 minimum wage by 2020.

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