These companies have paid bonuses or boosted pay since tax bill passed
One-time cash bonuses are the most popular way companies are sharing the windfall they expect from paying less in taxes. Many employers are boosting hourly pay. And a small number say they will increase matching contributions to workers’ 401(k) plans.
Walmart is the latest to join their ranks. The retail giant announced Thursday that it planned to boost the starting pay for hourly workers to $11 and pay up to $1,000 in a one-time cash bonus to eligible associates based on seniority.
The conservative group Americans for Tax Reform has compiled a list that shows that more than 125 U.S. employers, both big and small, have announced plans for bonuses and pay increases after the corporate tax rate was cut to 21% from 35%. According to ATR’s tally, more than 1 million American workers will “receive special bonuses” in the wake of tax reform.
While paying a one-time bonus of $1,000 is generous, a better approach would be for employers to deliver more permanent pay increases to workers, says Garrett Oakley, a certified financial planner at Betterment, an online investment site that provides so-called robo-advisory services.
“Something more permanent like increasing wages or increasing the 401(k) match,” Oakley says, is a better way to “boost the long-term savings” of employees.
Here’s a list of some of the major, well-known U.S. companies that have paid out bonuses or upped pay since President Trump signed the tax reform bill into law on Dec. 22:
|Company||Bonus||No. of employees getting bonus|
|Bank of America||$1,000||145,000|
|Fifth Third Bank||$1,000||13,500|
|Walmart||up to $1,000||n/a|
NOTES: BB&T also raised minimum hourly pay rate from $12 to $15, effective Jan. 1, 2018; Fifth Third Bank also boosted minimum wage to $15 per hour for all employees; PNC Financial also will raise minimum pay rate to $15 an hour by the end of 2018.
(SOURCE USA Today research, company announcements, Americans for Tax Reform, Associated Press)
In addition, a number of companies, including Visa, Aflac and Nationwide, have announced that they are taking steps to help employees save for retirement. These companies are boosting matching contributions to employees’ 401(k) retirement plans.
“Any extra cash an employer contributes to a worker’s 401(k) is a positive step — and a lucrative one,” says Anna-Louise Jackson, an investing specialist at NerdWallet, an online personal finance site. “Even a seemingly trivial amount — like an extra $20 each week — adds up to nearly $40,000 in 30 years.”