Walmart is raising the minimum wage to $11 for more than one million of its U.S. hourly workers as a result of sweeping new tax legislation, it said on Thursday.
The big box retailer will also expand its maternity and parental leave benefits, begin helping its workers cover adoption expenses and hand out one-time bonuses of up to $1,000.
The wage increase will be effective in February. Workers currently earn a minimum wage of $9 an hour, but can earn $10 an hour if they complete a training program.
Walmart follows companies like AT&T, Boeing and Wells Fargo in announcing bonuses or other benefits for workers as a result of a lower tax rate. In December, a Republican-controlled Congress passed tax reform in which the corporate tax rate was lowered from 35% to 21%. Other companies have pledged to invest billions in the U.S.
Walmart said that tax reform will allow it to become more competitive on the global stage and it will continue to seek ways in which it can pass along those savings to workers, customers and investors. It suggested it would continue to prioritize lower prices, better wages and training for workers and investments in technology amid fierce competition from Amazon.
“We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders,” said Walmart CEO Doug McMillon in a statement.
Walmart has already faced backlash from investors for prioritizing worker treatment. In 2015, it said it would spend $2.7 billion in order to improve employee wages and training. The stock tumbled and within hours some $20 billion was shaved from the company’s market capitalization.
The nation’s largest retailers have largely been in lockstep on wages as they compete for workers in a tight labor market. Target said in September it would hike its minimum wage from $9 to $11 an hour. Costco began paying entry-level workers $13 an hour in 2016.
Walmart expects the wage increase will add $300 million to its expenses in the next fiscal year on top of the amount it’s already spending on worker pay. The one-time bonus will add another $400 million.
The amount of the bonus will be based on the length of time a worker has been with the company, with $1,000 bonuses going to those with at least 20 years of service at Walmart.
Walmart will also allow full-time hourly workers to take 10 weeks of paid maternity leave and six weeks of paid parental leave, while salaried workers can take six weeks of paid parental leave. For parents who are adopting, Walmart will provide offset the cost by $5,000 per child.
Shares of Walmart, which are up 46% in the last twelve months, were flat in morning trading.
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