Finance

Walmart Minimum Wage Raised to $11, Bonuses Planned

Walmart Minimum Wage Raised to $11, Bonuses Planned

"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. Also, EVP John R. Furner sold 1,200 shares of Wal-Mart Stores stock in a transaction dated Friday, November 17th. Salaried associates will also receive six weeks of paid parental leave. The company's effective tax rate over the past three years has been around 32%. The retailer also said Thursday that it had suddenly closed 63 Sam's Club stores, affecting thousands of workers. And if that didn't put enough heat on Walmart, Target also said it plans to pay workers a minimum of $15 by 2020.

The world's largest private employer made it clear on Thursday it's still in the "early process" of looking at the new tax bill, which slashes corporate tax rates to 21 percent, and would provide more details on future investments next month.

Walmart's starting pay is now $9 for all hourly employees, or $10 for those who completed a training program.

More than one million store associates will benefit from the combined wage and benefit changes.

Employees restock shelves of school supplies at a Walmart location in Burbank, California, on August 8, 2017. This is the third minimum wage increase the company has implemented since 2015.

The hourly wage increase will cost about $300 million in 2018 and the one-time bonus represents an additional $400 million paid out this month, which is still part of Walmart's fiscal 2017.




Walmart says that this is only the start of its plans to offer more benefits to its employees.

The one-time bonus payment will be based on length of service, with the full $1,000 payment going to employees with at least 20 years of service.

Walmart's efforts in recent years to invest more in stores and its hourly employees is getting high marks from investors as the retailer's financial performance has improved.

The wage increase will cost Walmart $300 million for its fiscal year that starts February 1. Walmart and President Trump pointed to the announcement as proof that the corporate tax cuts are really a boon to working-class Americans. The stock ended last trade at 39.66 a share and the price is up more than 2.72% so far this year.

Retail Metrics founder Ken Perkins, who has estimated Walmart's tax savings could amount to roughly $2 billion this year, called Thursday's announcement "an astute move both from a political and business perspective". The one-time bonus represents an additional payment to associates of approximately $400 million in the current fiscal year, which ends January 31, 2018.

The company, which has 1.5 million employees in the US, also said it would expand maternity and paternity leave benefits, as well as give up to $5,000 to employees who are adopting a child. Those workers previously received up to eight weeks of maternity leave at half-pay, and were not entitled to parental leave.