The vast majority of Wal-Mart's U.S. employees will get raises as part of the world's largest retailer's previously announced commitment to invest in its workforce as it faces pressure from labor-backed groups and seeks to retain workers in a tighter labor force.
Wal-Mart Stores Inc. on Wednesday said more than 1.2 million U.S. hourly workers will get wage increases on Feb. 20. The company, which is the largest U.S. private employer with 1.4 million total workers, also said it will provide free, basic short-term disability to full-time hourly workers. And it will start allowing workers to accrue paid time off as they earn it.
The moves mark the biggest changes Wal-Mart has made in its efforts to offer better wages and benefits to its workers.
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Last February, Wal-Mart announced that it would raise base employee wages for 500,000 workers to $9 an hour last year, with plans to move it to $10 per hour, next month. The company also said new entry level workers hired after Jan. 1, 2016 would start at $9 per hour, but move to at least $10 an hour after completing a six-month training program. Then last June, Wal-Mart said it would raise starting wages for more than 100,000 U.S. department managers.
In total, Wal-Mart's CEO Doug McMillon said in October that last year's investment in wage increases, along with improved training, cost $1.2 billion. McMillon also said the company expects to pump $1.5 billion in to its workforce this year, although at the time he did not give details of other raises and perks to be offered.
As a result of the latest pay increase taking effect next month, the average full-time hourly wage at Wal-Mart stores will be $13.38, up from $13. For part-time workers, the hourly wage will be $10.58, up from $10. Last year, before the changes, the average full-time hourly wage was $12.85 and $9.48 for part-time. Wal-Mart declined to provide the average hourly wages for Sam's Club workers.
Those wages for Wal-Mart stores are still below the $14.95 average that hourly retail workers in a non-supervisory role earn, according to government data that includes people who work at auto dealers and other outlets that would likely pay more than discounters like Wal-Mart. But Wal-Mart's entry level pay is above the $9.26 average hourly pay for cashiers and low level retail sales staff, according to the Hay Group's survey of 140 retailers with annual sales of $500 million. The survey was conducted last summer.
Wal-Mart's moves have met some criticism. Wal-Mart's initial pay triggered complaints from workers who felt that the raises weren't spread out evenly. Many of the new employees were getting increases in pay, making their pay closer to other workers who had been at Wal-Mart for a long time. The company acknowledged Wednesday that some employees were upset.
"We did hear from some associates who did feel left out last time, but we specifically did it to reward associates in a fair, consistent and transparent way," said Wal-Mart spokesman Kory Lundberg.
Here are more details of Wal-Mart's plan:
— Workers who are already earn more than $10 per hour will receive an annual pay increase in February rather than waiting until the anniversary date.
—The company is also raising the starting rate of its non-entry level hourly pay bands. So specialists like deli sales associates will make between $10.50 and $18.81 per hour, up from $9.90 to $18.81. Workers at or above their pay band maximum will automatically move up to the new minimum.
— Workers who are at or above their maximum pay band will get a one-time lump sum payment equal to 2 percent of their annual pay.
— Starting March 5, full-time workers can carry up to 80 hours of paid time leave from year to year. That number will be 48 hours for part-time workers. Any unused hours at the end of the year above the limits will automatically be paid to hourly workers in the first paycheck every February. Previously, workers would just lose those days if they hadn't taken them.
— Wal-Mart is offering a short-term basic disability plan for workers who need to be away for an extended time. Effective Jan. 1, the plan will pay 50 percent of a worker's average weekly wage, up to $200, for up to 26 weeks.
—Wal-Mart is also enhancing its short-term disability plan, which now will cost less than the company's prior voluntary plan and provide more coverage. Workers will receive up to 60 percent of their average weekly wage with no weekly maximum for up to 26 weeks. Prior to that, the figure was 50 percent.