Walmart announced on Thursday that the company will be increasing the minimum hourly wage for U.S. employees to $11 an hour in response to the new tax reform bill.
Walmart is the world’s largest retailer in the country and has more than one million employees. In 2016, the company raised its minimum hourly wage to $9 an hour with an additional increase to $10 after eligible employees complete an internal training program.
Effective immediately, Walmart will also begin to pay a one-time maximum bonus of $1,000 to eligible employees. According to a Walmart spokesperson, the bonuses are determined by an employee’s length of service. In order to qualify for the maximum bonus, employees must have 20 years of uninterrupted service, or more. Employees with 15 to 19 years of uninterrupted service are eligible for a $750 bonus. Employees that have anywhere from two to four years of uninterrupted service with the company are eligible for a bonus of $250, while those who have worked for the company for five to nine consistent years are eligible for a $300 bonus. The cost to the company is estimated to be $400 million. Walmart will record the payout during its fourth quarter fiscal year, which is due on February 20.
The announcement of the bonus payouts by the retail company comes after Waste Management, Bank of America and JetBlue recently decided to pay its employees bonuses following the new tax legislation put into effect by Congress in December 2017.
In addition to the entry-level pay increase and bonuses, Walmart has also revised some of the company’s benefits. Beginning in February 2018, Walmart employees will receive a new benefit that provides financial assistance for adopting a child. The benefit includes a $5,000 financial reimbursement for expenses paid to adoption agencies, translation expenses and other legal costs associated with the adoption. Walmart has also made plans to expand its maternity and parental leave benefits for hourly employees.
CEO Doug McMillion released a statement that said in part: “Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.” The opportunity to strengthen the benefits and increase its wages for employees makes Walmart more competitive in the job market.
Walmart is in the early phase of assessing all opportunities that could benefit its employees and customers based on the tax reform bill. The new tax legislation is the largest overhaul the country has seen in more than 30 years.