Some of the companies giving out raises and bonuses because of tax reform
American corporations are chipper about tax reform. That’s been great news for some workers.
On Thursday, Walmart became the latest of dozens of companies to announce one-time bonuses related to the new tax law. Notably, the company also said it would raise its minimum wage to $11 an hour.
There are plenty of reasons for companies to reward workers right now. The economy is doing well, and unemployment is at a low 4.1%. In a tight labor market, companies often need to pay more and provide better benefits in order to fill open positions.
But the new tax law signed by President Trump certainly frees up a lot of cash. It cut the corporate tax rate from 35% to 21%.
Here’s a sampling of who is passing some of those savings along to employees.
The airline said on January 2 that it would give 130,000 employees a $1,000 bonus because of the new tax law.
American hasn’t been paying federal income taxes because of substantial losses in the past, but CEO Doug Parker said in a letter to team members that the tax package will give the company a boost down the road.
“We will be able to invest even more in aircraft and facilities, and we will be able to do so with even greater confidence about the future,” he said.
The telecom giant said on December 20, 2017 — the day Congress passed the tax bill — that it would give 200,000 U.S. employees a $1,000 holiday bonus.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” CEO Randall Stephenson said in a statement.
(AT&T is working to acquire CNN parent company Time Warner. The Justice Department sued to block the deal in November.)
Bank of America
The bank said on December 22, 2017 that those making up to $150,000 per year, or about 145,000 workers, would receive a one-time bonus of $1,000.
CEO Brian Moynihan highlighted tax reform in an internal memo announcing the news.
“Beginning in 2018, we will see benefits from the tax reform … in the form of lower corporate tax rates,” he said.
Comcast said on December 20, 2017 that it would give $1,000 holiday bonuses to more than 100,000 employees.
The telecom company added that it expects to spend “well in excess of $50 billion over the next five years investing in infrastructure to radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings,” according to a press release.
The release said the announcement was “based on the passage of tax reform.”
Fiat Chrysler announced Thursday that it will give 60,000 U.S. workers a one-time $2,000 bonus.
The company also said it’s moving production of the Ram heavy-duty truck from Saltillo, Mexico, to Warren, Michigan, in 2020.
“It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly,” CEO Sergio Marchionne said in a press release.
Fifth Third Bancorp
The financial services company said on December 20, 2017 that it would raise its minimum wage to $15 an hour for all employees. The firm also said it would give a one-time $1,000 bonus to more than 13,500 employees.
CEO Greg Carmichael credited tax reform legislation for the move.
“The tax cut allowed the Bank the opportunity to reevaluate its compensation structure and share some of those benefits with its talented and dedicated workforce,” Fifth Third said in a press release.
JetBlue said on January 4 that it would give $1,000 to all 21,000 of its crew members due to tax reform.
“We believe these tax changes will be positive for our company, and provide us the opportunity to do good things for our Crewmembers, Customers and shareholders … We believe our Crewmembers should be the first to benefit,” the company said in a letter to employees.
Southwest said on January 2 that it would “celebrate the recent tax reform legislation” by giving full-time and part-time employees $1,000 cash bonuses.
“We are excited about the savings and additional capital, which we intend to put to work in several forms,” CEO Gary Kelly said in a statement.
Southwest also said it would give an additional $5 million to charities, and pledged to buy more planes from Boeing, its aircraft supplier.
Walmart announced Thursday that it will give employees a one-time bonus of up to $1,000. The company is also raising wages for workers.
The nation’s largest retailer said it would increase its minimum wage to $11 an hour starting in February. Walmart last raised its minimum pay for employees to $10 an hour in 2015.
“Today, we are building on investments we’ve been making in associates, in their wages and skills development,” Walmart president and CEO Doug McMillon said in a news release. He credited tax reform for allowing the company to “accelerate plans for the U.S.”
The news came the same day Sam’s Club shut down multiple locations.
Walmart also said it would create a new benefit to help with adoption expenses and is expanding its paid parental leave policy.
The bank said on December 20, 2017 that it would raise the company’s minimum wage to $15 an hour, from $13.50.
“We believe tax reform is good for our U.S. economy and are pleased to take these immediate steps to invest in our team members, communities, small businesses, and homeowners,” CEO Tim Sloan said in a statement.
Wells Fargo also said it would increase its charitable giving in 2018 by about 40% to $400 million.