Wal-Mart Stores Inc. said on Thursday that they would raise the entry-level wage for hourly employees to $11 per hour. The company will benefit from the biggest overhaul of the United States tax code in over 30 years. According to the Daily Mail, the world’s largest retailer said the increase would go into effect in February. Not only would Walmart increase the minimum wage rate, but they are expanding maternity and paternity benefits and offering a one-time cash bonus, based on length of service, up to $1,000.
The pay increase and bonus will benefit more than 1 million employees, the report said. Currently, Walmart pays its employees $9 an hour. Afte they complete training, they get a raise of one dollar, making their wage $10 per hour.
The announcement from Walmart follows companies such as AT&T, Wells Fargo, and Boeing, who promised to pay their workers higher wages after Congress passed the tax bill which cut their corporate tax rate from 35 percent to 21 percent.
When President Donald Trump made his case for the tax bill, he claimed that businesses would have the money to increase the hourly rate of employees. He believed that the tax bill would benefit the working class. Trump hopes that it will lead to more people investing in United States companies.
Walmart’s CEO Doug McMillon said that they are in the early stages of figuring out how the tax bill will help their employees. One thing Doug did say was that the tax bill would give the retailer an opportunity to be more competitive at a global level and lead to more investment opportunities for the United States.
The retailer plans to modernize their stores, invest in the workforce, and transform the shopping experience for their customers.
“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. 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.”
The increase in employees’ pay will cost Walmart approximately $300 million. That’s not including wage hikes plans that were included in 2018 budget.
According to CNBC, the maternity and paternity benefits will be expanded.Walmart will offer full-time employees in the U.S. 10 weeks of paid maternity leave and up to six weeks of paid parental leave.
Walmart will offer a one-time cash bonus for employees, depending on their length of service. Employees with 15 to 19 years of service will receive $750, while those with 10 to 14 years will receive a $400 bonus. Five to nine years of service will yield a $300 one-time payment, while two to four years of service will give the employee a payout of $250.
Walmart added a new benefit which provides financial assistance to employees who are looking to adopt a child. The benefit will give them as much as $5,000 per child to cover the agency fees and legal cost.
Just last year, Target raised its minimum wage to $11 with plans to pay employees $15 per hour by 2020. However, the federal minimum wage has not increased since 2009 and remains $7.25 per hour.