Published: Fri, January 12, 2018
Markets | By Erika Turner

Walmart boosts starting pay to $11 an hour, offers bonuses

Walmart boosts starting pay to $11 an hour, offers bonuses

Walmart plans to start paying its one million USA workers at least $11 an hour and give them a one-off cash bonus.

The pay increase, Wal-Mart's third minimum wage increase since 2015, and bonus will benefit more than 1 million USA hourly workers, it said.

The pay hike at Walmart follows similar actions at rival Target Corp.

McMillon said Trump's corporate tax cut "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".

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.

Wal-Mart, the nation's largest private employer, has fought in recent years to improve its image in the US, as it weathered criticism over its treatment of employees.

The nation's unemployment rate has also plummeted to 4.1 percent from 5.7 percent since Wal-Mart's first announcement of higher wages in 2015, creating a battle to recruit and retain cashiers and shelf stockers.

"The wage increases will make a big difference to Walmart's lowest-paid associates, but do not yet match Target's commitment to raise pay to $15 an hour", said the Organization United for Respect at Walmart. The average for hourly earnings rose 2.5 percent in December from a year earlier.

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Wal-Mart said the new tax law will create "some financial benefit for the company" and that is it is in the early process of assessing additional investments.

The increase in Walmart's starting wage rate to $11 an hour will become effective in the February 17 pay cycle.

Over the past two years, Walmart has raised its starting hourly wages twice, to $9 and then to $10.

Currently, Wal-Mart's starting wage is $9 USA until workers complete a training program. 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. The one-time bonus represents an additional payment to associates of approximately $400 million in the current fiscal year, which ends January 31, 2018.

The one-time bonuses will range from $200 to $1,000, depending on how long workers have been with Wal-Mart.

Walmart said hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters, will benefit from the wage increase.

An expanded parental and maternity leave policy, providing full-time hourly associates in the US with 10 weeks of paid maternity leave and six weeks of paid parental leave. The retailer says it has spent about $2.7bn to increase wages over the past few years.

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