Starbucks to boost wages and expand benefits—again
Starbucks Coffee Company will spend more than $250 million on expanded employee benefits, including a pay raise for its 150,000 U.S. hourly and salaried employees, in the wake of the recent changes to the tax law. It’s also giving employees a one-time bonus via a stock grant.
The pay increase, for full-time and part-time Starbucks workers, will take effect in April, following an annual raise earlier this month. Also in April, the retailer will provide an additional 2018 stock grant for all eligible full-time, part-time, hourly and salaried U.S. employees.
All associates will receive at least a $500 grant, store managers will each receive a $2,000 grant and plant and support center partner (non-retail) grants will vary depending on annualized salary or level. Starbucks said the stock grant investment is valued at more than $100 million.
Starbucks is also expanding its already generous employee benefits program. Starting July 1, all employees will accrue paid sick time based on hours worked that they can use if they or a family member needs care. The sick time will accrue at a rate of one hour for every 30 hours worked. An employee working 23 hours a week can expect to accrue approximately five days of sick time benefit over the course of one year. (The new sick time benefit follows an expansion in the chain’s parental leave policy, which was announced last year.)
“While Starbucks already pays above the minimum wage in all states across the country, we have always felt strongly that a valuable benefits package must complement and contribute toward an industry-leading total compensation package,” CEO Kevin Johnson wrote in a note to employees on the company’s website. The value of Starbucks benefit package (fully accessed) is unmatched by other retailers and provides thousands of dollars of additional compensation value.
Starbucks also reaffirmed its commitment to create more than 8,000 new part-time and full-time retail jobs and an additional 500 manufacturing jobs in its Augusta, Georgia soluble coffee plant.
Starbucks is the second biggest retailer after Walmart to announce expanded employee benefits in the wake of the tax cut.
Credit Suisse analyst Jason West recently estimated that Starbucks' global tax rate could fall to about 24%-25% from around 33%, which would drive roughly $425 million in annual tax savings, reported CNBC.