SEATTLE, U.S. – Starbucks Coffee Company announced yesterday a series of new partner (employee) offerings that span across wage and benefits. These offerings will total more than $250 million for more than 150,000 partners and are accelerated by recent changes in the U.S. tax law.
Further details on the impact of these changes on the 2018 financial statements and earnings guidance will be discussed during our January 25 earnings call.
Starbucks provided the following details regarding these investment decisions:
- Starbucks pays above the minimum wage in all states across the country. In April, all eligible U.S. hourly and salaried partners will receive a second wage increase in addition to the annual increases that they have already received this fiscal year. This will include an investment of approximately $120 million in wage increases that will be allocated based on regional cost of living and laws that vary from state to state.
- On April 16, they will provide an additional 2018 stock grant for all eligible full-time, part-time, hourly and salaried U.S. partners across our stores, plants and support centers, who have been active as of Jan. 1, 2018. All Starbucks retail partners will receive at least a $500 grant, store managers will each receive a $2000 grant and plant and support center partner (non-retail) grants will vary depending on annualized salary or level. This investment alone is valued at more than $100 million.
- A new Partner and Family Sick Time benefit will be available to all eligible U.S. partners, which will allow partners to accrue paid sick time based on hours worked and then use them if they or a family member needs care. When this benefit goes into effect this year, Sick Time will accrue at a rate of one hour for every 30 hours worked, thus a partner working 23 hours a week can expect to accrue approximately five days of sick time benefit over the course of one year.
- Starbucks has also reaffirmed their commitment to create more than 8,000 new part-time and full-time retail jobs and an additional 500 manufacturing jobs in its Augusta, Georgia soluble coffee plant.
- For store partners, Starbucks has also expanded their parental leave policy to include all non-birth parents with up to 6 weeks of paid leave when welcoming a new child.
These new offerings are in addition to the nearly $7 billion of capital that Starbucks will deploy to build and renovate stores, manufacturing plants and technology platforms in the U.S. over the next five years.
Starbucks remains committed to providing opportunities to tens of thousands of Americans from disadvantaged backgrounds.
Starbucks is the latest to say it’s boosting pay or benefits due to the passage of the Republican tax plan, which slashed the corporate tax rate from 35 percent to 21 percent. Walmart, for example, raised its starting hourly salary from $9 to $11 earlier this month, and also expanded its parental leave benefits.
Target had also announced in October that it would raise its starting hourly wage to $11, and said it would raise wages to $15 by the end of 2020.
