Wal-Mart Stores, Inc. (NYSE:WMT) announced its decision to increase the wages of more than 1.2 million associates at Walmart U.S. and Sam’s Club next month. The company will also implement a new short-term disability and simplified paid time off (PTO) program.
Wal-Mart is the world’s largest retailer and the biggest private employer in the United States. The salary increase and PTO program are part of the company’s $2.7 billion investment in workers over the next two years. The retail giant will start implementing the wage hike on February 20.
In a statement, Judith McKenna, chief operating officer for Walmart U.S., said, “We are committed to investing in our associates and to continuing to simplify our business. When we do so, there is no limit to what our associates can accomplish. “
McKenna added that helping associates grow and succeed is also beneficial to the company. He noted that the retail giant’s business in the United States achieved five consecutive quarters of positive comps.
Wal-Mart wage hike details
According to Wal-Mart, it will increase the wages of all associates hired before January 1 to $10 per hour, a 2% increase. The new-entry level associates will continue to receive $9 per hour. After completing the new retail skills and training program known as Pathways, their salary will become $10 an hour.
The associates already earning more than $10 per hour will receive an annual pay increase next month instead of waiting until their anniversary date.
Wal-Mart said its associates earning at or above their pay band maximum will receive a one-time lump sum payment equivalent to 2% of their annual pay.
The retail giant is raising the starting rate of its hourly pay bands across the spectrum. The company’s average full-time hourly wage will be $13.38 and the average part-time hourly wage will be $10.58 when the changes take effect next month.
Since last year, Wal-Mart CEO Doug McMillan has been raising salaries as labor activist criticize the company. In October, the company stated that the salary increases would cost %1.5 billion, and expected its profit to decrease around 6% to 12% for the fiscal year ending January 2017.
Wal-Mart provides additional benefits
Wal-Mart said is also providing its full-time, hourly associates with a new Short Term Disability Basic Plan in addition to the PTO.
The plan offers more financial protection to workers who need to be away from work for an extended period due to medical needs. Workers will receive a 50% of their average weekly salary (as much as $100) for up to 26 weeks.
Furthermore, Wal-Mart is proving a Short Term Disability Enhanced Plan that provides more coverage (60% of their average weekly wage with no weekly maximum for up to 26 weeks). The plan costs less than the previous voluntary plan.