Walmart is raising the minimum wage for all hourly associates in the U.S. from $9 to $11, expanding maternity and parental leave benefits and providing a one-time cash bonus of as much as $1,000 for eligible employees.
The higher associate wages will take effect Feb. 17, 2018 and will add approximately $300 million to the annual wage hikes that were already included in next fiscal year’s plan. The one-time bonus represents an additional payment of approximately $400 million in the current fiscal year, which ends Jan. 31, 2018.
Walmart CEO Doug McMillon attributed the wage increase to the recent tax reform act passed on Dec. 20, 2017, legislation that the National Retail Federation (NRF) applauded.
“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,” said McMillon in a statement. “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 will share details regarding how the new tax law, which slashes the corporate tax rate from 35% to 21%, will affect the company when it posts quarterly earnings on Feb. 20.
The wage hike for Walmart follows Target’s move late last year to raise its minimum hourly wage to $11, with plans to increase it to $15 by 2020.
Hourly associates in Washington, D.C., California, Washington State and Massachusetts already earn at least $11 an hour. New York, Arizona, Colorado, Maine and Oregon will reach that figure next year, reflecting state-level efforts that have gained steam.
On top of the wage hike, Walmart also is creating a new benefit that provides financial assistance to employees who are looking to adopt a child, giving them as much as $5,000 per child to cover expenses such as adoption agency fees, translation fees and legal costs.