Walmart joins the tax cut bonus club
Walmart is raising its minimum wage and handing out $1,000 bonuses because of President Trump's new tax law.
The retailer said the wage increase to $11 an hour would roll out in February. Some employees are also getting a one-time bonus of up to $1,000.
Walmart previously raised its minimum pay for most employees to $10 an hour in 2015. As of December, the average pay for full-time workers was $13 an hour.
“Today, we are building on investments we’ve been making in associates, in their wages and skills development,” said Doug McMillon, Walmart president and CEO. “It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families. 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. However, some guiding themes are clear and consistent with how we’ve been investing -- lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
This increase in wages to associates will take effect in February and will be approximately $300 million incremental to what was already included in next fiscal year’s plan. The one-time bonus represents an additional payment to associates of approximately $400 million in the current fiscal year, which ends Jan. 31, 2018.
While the new law will create some financial benefit for the company, Walmart is early in the process of assessing potential additional investments. That assessment will be done not only through the lens of associates, customers and shareholders, but also within Walmart’s financial framework of strong, efficient growth, consistent operating discipline and strategic capital allocation. Further details will be shared, as appropriate, when the company releases quarterly results Feb. 20, 2018.
Associates will hear more from their managers in the coming days about details.
But, broadly, associates in the U.S. will share in tax savings through:
- A one-time bonus benefiting all eligible full and part-time hourly associates in the U.S. The amount of the bonus will be based on length of service, with associates with at least 20 years qualifying for $1,000. A discrete one-time charge will be taken in the fourth quarter of the current year to account for the bonus; qualification will be determined before the end of the month and payments will be paid as quickly as practical thereafter.
- An increase in Walmart’s starting wage rate to $11 an hour, effective in the Feb. 17, 2018, pay cycle. The change is in addition to wage increases already planned for many U.S. markets in the coming fiscal year. The increase applies to all hourly associates in the U.S., including stores, Sam’s Clubs, eCommerce, logistics and Home Office.
- An expanded parental and maternity leave policy, providing full-time hourly associates in the U.S. with 10 weeks of paid maternity leave and six weeks of paid parental leave. Salaried associates will also receive six weeks of paid parental leave.
- Walmart will provide financial assistance to associates adopting a child. The adoption benefit, available to both full-time hourly and salaried associates, will total $5,000 per child and may be used for expenses such as adoption agency fees, translation fees and legal or court costs.