Walmart, the largest US private employer with more than 1 million workers, said Thursday it plans to raise starting wages from $9 to $11 an hour and hand out employee bonuses ranging from $200 to $1,000, becoming the latest company to give a least some of the credit for new worker benefits to the recently passed tax plan.
Trump's tax cut plan in December, Boeing and AT&T said that they would give more than 200,000 union-based employees a bonus of $1,000.
The tax bill, which lowered the corporate rate from 35 to 21 percent, also prompted the company to expand its maternity and parental leave policy and provide financial assistance to employees planning to adopt.
In a statement on the company's website, Walmart president and CEO Doug McMillon said the tax legislation "gives us the opportunity to be more competitive globally and to accelerate plans for the U.S".
Walmart plans to start paying its one million U.S. workers at least $11 an hour and give them a one-off cash bonus. Almost 85,000 employees with 20 years' seniority will quality for a $1,000 cash bonus, and another 200,000 workers will get a $750 bonus.
The new wages start February 17, 2018 and apply to hourly associates in US stores, Sam's Clubs, logistics and Home Office.
The company is also expanding its maternity leave policy to 10 weeks, as well as offering six weeks for paternity leave. Full-time hourly and salaried workers can receive up to $5,000 per child to use for adoption agency fees, translation services or legal costs.More news: Golden Globes Opening Speech: Seth Meyers Tackles Kevin Spacey & Harvey Weinstein
A Walmart spokesperson told BuzzFeed News that the company will continue to look at how it will use its tax savings over the year, but that it is focused on investing in its associates, technology, and cutting prices.
"We think this is a prudent use of tax reform proceeds, as it reinforces the company's commitment to improving in-store service levels and will pressure other retailers to invest more heavily into wages and prices", Ben Bienvenu, an analyst at Stephens, said in a note. The company's revenue for the quarter was up 4.2% on a year-over-year basis. sell-side analysts forecast that Wal-Mart Stores, Inc. will post 4.43 earnings per share for the current year.
This increase in wages will be approximately $300 million incremental to what was already included in next fiscal year's plan.
Wal-Mart Stores, Inc. has a 12 month low of $65.28 and a 12 month high of $102.35.
The one-time bonus Walmart announced this morning amounts to just over 2 percent of the total value of the tax cut to the company. The one-time bonus payment increases planned spending by an additional $400 million. A total of 18 states have increased minimum pay this year. Costco's starting wage is at least $13 an hour while Target is gradually its starting hourly wage to $15 by 2020.
Walmart's current starting wage is $9 until workers complete a training program that boosts their wage to $10.