Kroger extended a $2 hourly wage increase one final time to May 23.
Photo: Jeremy Hogan/SOPA Images/Zuma PressSome of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of unemployed Americans surge.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers in stores and warehouses and on the road.
Workers and unions are pushing back, saying they still face extra risk at work.
“As long as we are wearing gloves, as long as we are wearing masks and social distancing, it seems obvious to me that we are working in hazardous circumstances,” said John T. Niccollai, president of United Food & Commercial Workers Local 464A, based in Little Falls, N.J. “It is manifestly unfair to eliminate the hazard pay at this point.”
As the Covid-19 pandemic spread in the U.S., many grocers, drugstore chains and essential retailers introduced a temporary $2 hourly increase, a one-time bonus or both. Now some are curtailing that pay as they grapple with rising expenses and expectations of a U.S. recession.
For retailers, labor has already become expensive as minimum wages climbed in recent years. Adding to costs are new needs, such as securing protective equipment for staff and spending more to sanitize stores and distribution centers. Home Depot Inc. said Tuesday it spent $850 million on extra pay, benefits and safety measures in its latest quarter.
At the same time, more than 36 million Americans have filed for unemployment since March, creating a new talent pool for employers with large hourly staff and high turnover. In recent months, Walmart Inc. and Amazon have hired more than 400,000 people.
Rite Aid ended its $2-per-hour bonus pay on May 16, after extending it for two weeks.
Photo: Richard B. Levine/Zuma PressAmazon is offering extra pay for warehouse workers through the end of May, instead of ending the practice on May 16 as originally planned, and will return to regular wages in June. The e-commerce giant has been paying warehouse and delivery workers an additional $2 an hour, along with double overtime pay, since mid-March. An Amazon spokeswoman said the company viewed the extra pay as an incentive rather than hazard pay.
Kroger extended a $2 hourly wage increase one final time to May 23 and offered a one-time payment of $400 for full-time staff and $200 for part-time staff. The special pay was set to expire in mid-May. The Cincinnati-based company said the extension will amount to $130 million and that it has spent $700 million on bonuses and various safety measures since March.
Pharmacy chain Rite Aid ended its $2-per-hour bonus pay on May 16, after extending it for two weeks. Competitors CVS Health Corp. and Walgreens Boots Alliance Inc., paid bonuses rather than higher hourly wages. CVS said it would pay a second round of bonuses in June.
“We have been extending as needed,” said Dave Hirz, chief executive of Smart & Final Stores Inc., a chain of warehouse food stores. His company in March introduced a $2.25 hourly wage increase for front-line workers and plans to offer the pay at least through the end of May.
Mr. Hirz said the increase wasn’t intended to persuade staffers to come to work but rather to thank them. Fewer employees are calling out sick today versus a year ago. Still, Smart & Final doesn’t plan to make a permanent change because the chain already pays more than $17 an hour on average, Mr. Hirz said.
Workers and union groups are calling for retailers to extend the hazard pay, saying they are risking their health to be at work and will remain in risky roles throughout the pandemic. UFCW local union groups, which represent more than 20,000 grocery workers in Southern California, are calling on Kroger to maintain bonus pay and improve safety practices.
Jackie Mayoral, who works at a Kroger-owned Ralphs store in Hollywood, Calif., has been staying home since mid-April, when she tested positive for Covid-19. She said extra pay should be extended for grocery workers until the lockdown lifts.
“They are still putting their life on the line,” said Ms. Mayoral, 54. The grocery store is located on Sunset Boulevard, and 10% of the workforce there has tested positive. “It’s a slap in the face.”
Target Corp. is extending its $2-an-hour pandemic wage increase through July 4 for store and distribution workers. The retailer has previously pledged to increase its $13 minimum hourly wage to $15 by the end of 2020, matching Amazon’s starting wage in the U.S.
Target is extending its $2-an-hour pandemic wage increase through July 4 for store and distribution workers.
Photo: David Paul Morris/Bloomberg News“As states start to reopen and businesses restart, we can’t lose sight of the fact that it’s going to take time to work through the pandemic,” Target CEO Brian Cornell said Monday in a memo to workers.
Walmart has been paying cash bonuses instead of raising hourly wages. The company, which employs around 1.5 million people in the U.S., said last week it would pay a second bonus to those employed as of June 5. It booked about $900 million in Covid-19 expenses in the latest quarter, but rode a surge in sales.
Skogen’s Foodliner Inc., which operates the Festival Foods grocery chain in Wisconsin, has been reviewing whether to extend the bonus pay, but is unsure on how long.
“These guys are doing wonderful things to be working in front of people, but we don’t know,” said Mark Skogen, chief executive of Festival Foods. “When is the danger gone?”
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