Walmart to hike pay of most U.S. workers; adding free short-term disability

The largest single-day, private sector pay increase ever will take effect Feb. 20, when more than 1.2 million Walmart U.S. and Sam’s Club associates receive a pay increase.



The salary hike is the second phase of the company’s two-year, $2.7 billion investment in workers. But it is broader than the original plan, which was announced last fall.



Under the plan announced on Wednesday, all associates hired prior to January 1, 2016 will earn at least $10 per hour. Associates hired after January 1 will earn $9 per hour, but will be boosted to $10 an hour after successfully completing the chain’s training program. Associates already earning more than $10 per hour will receive an annual pay increase in February rather than waiting until their anniversary date.



As a result of the pay increases, Walmart’s average full-time hourly wage will be $13.38 per hour, the company said, and the average part-time hourly wage will be $10.58 per hour.



The chain also announced it is implementing a new short-term basic disability plan that will take effect this year at no cost to full-time hourly employee and pay 50% of a worker’s average weekly wage, up to $200, for up to 26 week. It’s also launching a simplified paid time off (PTO) program that will make vacation days more readily accessible.



“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,” said Judith McKenna, COO for Walmart U.S. “Our customers and associates are noticing a difference. We’re seeing strong increases in both customer experience and associate engagement scores. Five straight quarters of positive comps in our U.S. business is just one example of how helping our associates grow and succeed helps the company do the same.”



Here are more details of the Walmart announcement:



• Walmart is raising the starting rate of its non-entry level hourly pay bands. Anyone earning below the new minimum will automatically move up to the new minimum. Associates at or above their pay band maximum will receive a one-time lump sum payment equal to 2% of their annual pay.



• Walmart and Sam’s Club are launching a new, simplified PTO policy, effective March 5, 2016 that will streamline paid vacation, sick time, personal time and holiday time into one category. Also, the one-day wait to use sick time will be eliminated, as promised. When the plan rolls out in March, both full- and part-time associates will earn PTO based on tenure and hours worked.



• In addition to providing a new, short-term disability basic plan, Walmart is also offering a short-term disability enhanced plan, which costs less than the company’s prior voluntary plan and provides more coverage. Associates would receive up to 60% of their average weekly wage with no weekly maximum for up to 26 weeks.