The GOP tax law prompted CVS to announce it would be raising the minimum wage at its stores to $11 per hour, up from $9 per hour. That brings it back in line with competitors Target and Walmart. CVS will also raise wages for employees who are already earning more than that. From CNBC:
CVS Health will increase employee pay and sweeten benefits to some employees using a portion of the company’s windfall from the new tax law.
CVS will boost starting pay for hourly employees to $11 per hour from $9 per hour, starting in April. Pay ranges and rates will be adjusted for many of its retail pharmacy technicians, front store associates and other hourly retail employees later in the year. Full-time employees will qualify for as much as four weeks of paid parental leave, and worker health-care premiums will hold steady at current rates.
The health-care company has more than 240,000 employees.
USA Today reports the changes in compensation will cost an additional $425 million per year:
CVS also plans to increased its paid parental leave policy to four weeks at 100% compensation for all new parents and said it would not increase employee health insurance premiums in its upcoming plan year.
Taken together, the company said the moves would cost $425 million annually.
“As part of our ongoing commitment to the patients, customers and communities we serve, we said that we would invest our tax savings back into our business, and that’s exactly what we’re doing,” CVS CEO Larry Merlo said in a statement. “Today, we’re building on the investments we’ve been making in our employees, in their wages, benefits and career development.”
All of this brings CVS back in line with Walmart, the largest retail employer in the country, which announced it was raising its minimum wage to $11 per hour and giving out $1,000 bonuses last month. The company also announced an expansion of maternity and parental leave.
CVS is expecting to see about $1.2 billion from the tax cut law, much of the remainder will go into reducing debt from its anticipated purchase of Aetna, the nation’s 3rd largest health insurer. That deal is still expected to go through later this year, assuming antitrust regulators allow it. Democrats, led by Nancy Pelosi, have continued to bash the tax law saying it gives only “crumbs” to families.