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Good News, Bad News: Walmart Boosts Pay, Closes Sam’s Club Stores
Walmart, the nation's largest private employer, announced it’s raising entry-level pay to $11 an hour for all of its U.S. employees. It will also be giving out bonuses up to $1,000.
For a company that prides itself on rollbacks, this pay raise is anything but.
The change comes on the same day that Walmart announced it is closing 63 Sam’s Club stores across the country.
The retail giant is crediting the pay raise to the recent tax overhaul, which cut the corporate tax rate from 35 percent to 21 percent. While the company expects to add $300 million in annual expenses thanks to the pay raise, it looks to save billions thanks to the new bill.
Walmart isn’t the first to announce a pay raise for its employees following the tax cut. Wells Fargo is raising minimum wage to $15 an hour, and AT&T Inc. will be giving out bonuses to most of its U.S. employees.
Who Will See These Changes?
So who exactly gets to reap these benefits?
All full- and part-time hourly employees in the U.S. are eligible for the one time bonus, maxing out at $1,000. The amount received is based on how long the employee has been with the company. Those who have been there for at least 20 years will get the full $1,000.
With over 1.5 million employees in the U.S., Walmart expects to spend upward of $400 million on bonuses this year.
The raise in minimum wage, up from $10 an hour, will begin in February 2018 and applies to all hourly employees. While current full-time Walmart employees make an average of $13.85 an hour, this pay raise will bring it up to $14.50.
Thanks to competition in the workforce, this is the third time in two years that Walmart has raised minimum wage. Cities and states across the country have raised hourly pay over the last few years, and 2018 doesn't look like it's going to be much different.
Beefing Up Benefits
Along with the raise of hourly pay and distribution of bonuses, Walmart is moving to boost some of its benefits, including its parental leave policy.
Full-time hourly employees can now get 10 weeks of full-pay maternity leave, up from eight weeks. Additionally, paid parental leave has been boosted to six weeks.
The company is also offering financial assistance for those looking to adopt. Full-time hourly and salaried employees can get up to $5,000 per child, which can be spent on expenses that come along with adoption, such as adoption and court fees.
Kaitlyn Blount is a junior staff writer at The Penny Hoarder.