Citing New Tax Law, Walmart To Raise Starting Wages, Expand Parental Leave

Alicia Cross
January 12, 2018

Today, Walmart announced plans to increase the starting wage rate for all hourly associates in the $11, expand maternity and parental leave benefits and provide a one-time cash bonus for eligible associates of up to $1,000.

The retail company said the wage hike to $11 an hour would roll out in February. The amount will range up to $1,000 for employees who have been with Walmart for at least 20 years. Critics of tax reform have said companies are dishing out bonuses for the sake of good publicity and to curry favor with the White House.

The increase for the nation's largest private employer also comes amid political pressure to bolster minimum wages and comes amid a hot streak for the retailer.

-Wal-Mart Stores Inc. will raise entry-level wages for United States hourly employees to $11 an hour in February as it benefits from last month's major overhaul of the U.S. tax code, the company said on Thursday.

According to the company, all of these wage and benefit changes will positively affect its 1 million-plus USA hourly associates.

Wal-Mart employs about 2.2 million people globally, with more than 1.5 million in the USA and had total global revenue of almost $500 billion past year.

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The move follows last month's U.S. tax code overhaul that cut the corporate rate from 35% to a flat 21%. The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the United States, he said. The increase cut into profit and was criticized by some longer-tenured employees as unfair to them. The change is in addition to wage increases already planned for many USA markets in the coming fiscal year. Salaried associates will also receive six weeks of paid parental leave.

The company will also expand hourly leave, "providing full-time hourly associates in the USA with 10 weeks of paid maternity leave and six weeks of paid parental leave", it says.

Parental leave has been another area in which retailers including Target and Ikea have been trying to offer better benefits.

Walmart said hourly employees at its websites, distribution centers and its Bentonville, Arkansas, headquarters, will benefit from the wage increase. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said.

But raising wages is something you could argue Walmart needed to do even in a less-favorable tax environment. It has done well and strengthened its hand in online retail as many other retailers have struggled. Currently, Walmart's starting wage is $9, which goes up to $10 once employees complete a training program. Walmart's online business is surging.

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