Walmart plans to increase its employees' starting wage to $11 an hour, expand maternity and paternal leave benefits, as well as provide a one-time cash bonus up to $1,000.
The company is offering a one-time bonus to all full- and part-time employees based on their length of service, rising to $1,000 for employees with 20 years of service. (The company now offers six to eight weeks of partially paid maternity leave and no parental leave.) The Bentonville, Arkansas-based company will also offer adoption benefits for $5,000 per child to full-time hourly and salaried employees.
The wage increase will affect over one million USA hourly workers. The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the United States, he said.
Walmart says the wage increase benefits all hourly USA workers within its stores, including Sam's Club, its website and logistics.
Walmart is planning to give back a portion of its billions of dollars in savings from new tax legislation to workers - in wages, bonuses and other benefits. Additionally, many states have increased their minimum wage above $10.
The pay hike at Walmart follows similar actions at rival Target Corp. Prior to Walmart's announcement, the total amount of bonuses pledged amounted to 0.09 percent of the value of the tax cuts to corporate America over 10 years.
Labour groups have said that past rises in wages at the retailer have led to a cut in work hours for employees as the company sought to offset the impact on profits.
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The retailer is also coming off a resurgence in same-store sales in recent years, giving it more of a cushion to boost pay. In all, Walmart employs 2.3 million people around the world, 1.5 million of which are in the U.S.
"We think this is a prudent use of tax reform proceeds, as it reinforces the company's commitment to improving in-store service levels and will pressure other retailers to invest more heavily into wages and prices", Ben Bienvenu, an analyst at Stephens, said in a note.
In addition, the company is paying bonuses ranging from $200-$1000 for workers who were already making $11 or more.
"Walmart really started to turn a corner a couple of years ago when it started to simultaneously invest in stores, logistics, e-commerce and employee wages", Perkins told CNBC.
The hike announced today will also increase the average hourly pay for full-time employees to $14.50 from a current $13.85.
The retailer has spent about $2.7 billion to increase wages over the past few years.
"A better solution would be to raise the federal minimum wage and not leave it up to corporations", Gould said.