Walmart to raise starting wage, expand maternity and parental leave

Taking effect in February, the starting wage for hourly associates will increase to $11.

Walmart is raising its starting wage for all hourly associates in the United States, handing out bonuses and expanding maternity and parental leave benefits — including providing financial assistance for adoption.

The nation’s largest private employer will increase the starting wage rate for its more than one million hourly associates in the United States to $11, and provide a one-time cash bonus for eligible associates ranging from $200 to up to $1,000. (Rival Target raised its minimum wage to $11 last fall.) The company said the changes partially motivated by anticipated savings from the new tax plan, which provides deep tax cuts to corporations.

The pay increase, which takes effect in the Feb. 17, 2018, pay cycle, is in addition to wage increases Walmart has already planned for many U.S. markets in the coming fiscal year.

The cash bonus will be provided to all eligible full and part-time hourly associates. The amount will be based on length of service. Associates with at least 20 years will qualify for $1,000.

This increase in wages 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. Walmart said a “discrete” one-time charge will be taken in the fourth quarter of the current year to account for the bonus.

Walmart is also expanding its 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.

The retailer will also 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.

“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. “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.”

Walmart said it 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,” the company stated.

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