The premiums, which recognize the work of employees, part-time and full-time during the pandemic, will be paid at the end of July, according to the company, which has more than 350,000 employees and nearly 1 900 in the United States
The announcement of the Target is the culmination of several years of increasing the wages of employees. Three years ago, the retailer announced a plan to increase its hourly wage starting from $ 10 to $ 15 over three years. It has increased the minimum wage to $ 13 per hour last June, and has committed to raise it to 15 $ by the end of 2020.
The company is expanding the benefits it has begun to offer during the pandemic, including relief care free for employees ‘ children or adults in need until August, free advice in the field of mental health and a paid leave of 30 days for employees at higher risk of Covid-19.
Starting this week, it has added a new benefit: all employees can access free of charge to the virtual visits to the doctor until the end of the year, even if they do not receive health insurance through Target.
The change in the minimum wage will actually be an increase of about 275,000 employees, said the company. The employees of some cities, such as New York and San Francisco, already had a salary of at least $ 15 per hour.
Target is one retailer that kept its doors open for sale of essential items from the grocery store in the toilet paper when ordering at home. While the employees continued working and took on new tasks, such as disinfection and replenishment frequent shelves, Target has announced a salary increase temporary of $ 2 per hour to at least $ 15 in march, and it has been extended until 4 July.
Also in march, the retailer has paid premiums of $ 250 to 1 500 $ 20 000 team leaders schedules that oversee the shelves of the stores.
With the higher wages, Target is spending nearly a billion dollars more this year than last year for expenses related to the employees, many of which related to the pandemic. He extended the paid leave to employees during the crisis of Covid-19, purchased the equipment of protection for them and donated $ 1 million to the Target Giving Member Giving Fund, which helps workers who are facing unforeseen financial challenges.
The margins Target has suffered the pressure of expenses related to the pandemic. At the same time the cost of labor additional, the company has sold fewer items at a high margin, such as clothing and accessories, in the first quarter. The transition of customers to the online shopping also has reduced the profits, because the company has had to ship most of items to homes or prepare them for pick-up at the edge of the street.
The chief executive officer, Brian Cornell, said to journalists during a conference call in may that the cost of the increased wages, the cleaning of stores and special benefits such as additional childcare amounted to approximately $ 500 million during its first fiscal quarter, which ended on 2 may. and improved benefits that are being extended until the beginning of July.
Target catches up with some of the rivals and increases the pay gap with other. The hourly wage at Walmart starts at $ 11 / hour. At Amazon, wages start at $ 15 an hour. The federal minimum wage is 7.25 $. It has been increased for the last time in 2009, but some States and cities have set the bar higher than the government requirement.
Target increases salaries at a time when protesters across the country are pressing for racial equity. In addition to calling for justice in the death of George Floyd in the hands of the police, they have raised questions about the role of companies in expanding economic opportunities – particularly for Black americans and the essential workers who pay little but risked their lives during the pandemic, such as those in grocery stores and nursing homes.
Before the pandemic, while the U.s. unemployment had dropped to a single digit and that it was difficult for employers to fill jobs, increased wages, and the companies have softened their benefits to attract workers. For example, Walmart has begun to subsidize the university for the employees and their charge only $ 1 per day for the cost of tuition.
Since then, however, efforts to slow the spread of the coronavirus have temporarily closed stores and restaurants and led to millions of layoffs and furloughs. As the States relax the restrictions, some workers could be rehired, but unemployment is expected to remain higher than before the spread of the virus during a certain period of time.