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Wal-Mart raises its hourly starting wage to $11, hands out bonuses of up to $1,000

By James F. Peltz • Jan 12, 2018 at 11:00 AM

Wal-Mart Stores Inc. said Thursday that it plans to lift its minimum wage to $11 an hour for its U.S. workers and provide them with a one-time cash bonus of up to $1,000 due to expected gains from the new tax law.

The nation’s largest retailer, with about 1.5 million U.S. employees and nearly $500 billion in global revenue, also said it would expand its workers’ maternity and parental leave benefits.

The changes also apply to Wal-Mart’s Sam’s Club, Home Office, e-commerce and logistics subsidiaries, and the new wages take effect in mid-February, the company said.

“We are building on investments we’ve been making in associates, in their wages and skills development,” Wal-Mart Chief Executive Doug McMillon said in a statement.

Although Wal-Mart’s move lifts its overall starting U.S. wage from $10 an hour (after workers take a training course), the increase matches what’s already the minimum wage in California. Wal-Mart has about 315 outlets in the state.

On Jan. 1, the starting wage for large companies with more than 25 employees in California rose to $11 an hour from $10.50 as part of a state minimum-wage law approved in 2016. The starting wage in California eventually will reach $15 an hour by 2022.

And minimum-wage workers in certain Southern California cities — including Los Angeles, Santa Monica and Pasadena — already are being paid more than $11 an hour because of local wage ordinances.

The new tax law lowers the U.S. corporate tax rate to 21 percent from 35 percent, among other things, and McMillon said Wal-Mart was “in the early 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.”

The one-time bonus, which will vary depending on a worker’s length of service, would total about $400 million in Wal-Mart’s current fiscal year that ends Jan. 31, the retailer said.

In its fiscal year ended Jan. 31, 2017, Wal-Mart had profit of $13.6 billion on worldwide revenue of $485.9 billion.

Wal-Mart said in an email that maternity leave is for mothers who physically give birth and that parental leave is for “non-birthing mothers, fathers, partners, adopting parents, families doing foster care, same-sex couples adopting and so forth.”

Before the change announced Thursday, it said, “full-time hourly workers were eligible for six to eight weeks of maternity leave at 50 percent pay, and Wal-Mart did not offer any parental leave for full-time hourly workers. Now, they will be eligible for 10 weeks of maternity leave at 100 percent pay and six weeks of parental leave at 100 percent pay.”

It also said it is offering adoption assistance for the first time of $5,000 per child.


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