Wal-Mart will end ex­tra pay on Sun­day

The Pak Banker - - Company& -

NEW YORK: Wal-Mart Stores Inc., the largest pri­vate em­ployer in the U.S., plans to stop pay­ing staff there an ad­di­tional $1 an hour for work­ing Sun­days, tak­ing a bite out of its sin­gle biggest ex­pense.

The move, which takes ef­fect next year, ap­plies only to em­ploy­ees hired af­ter Jan. 1, spokesman Greg Ros­siter said in an in­ter­view yes­ter­day. The move wouldn't af­fect the Ben­tonville, Arkansas-based re­tailer's 1.4 mil­lion cur­rent U.S. staff.

Since tak­ing over al­most two years ago, Chief Ex­ec­u­tive Of­fi­cer Mike Duke has pledged to slow cost growth as the re­tailer copes with six straight quar­ters of sales de­clines at U.S. stores open at least a year. Op­er­at­ing ex­penses rose to about $80 bil­lion last year, partly be­cause of health ben­e­fits.

"It's sad-peo­ple who work on Sun­day need that ex­tra dol­lar," Cyn­thia Mur­ray, a Wal­Mart em­ployee at a su­percen­ter in Lau­rel, Mary­land, said in an in­ter­view. Mur­ray said she makes $11.20 an hour, and doesn't work Sun­days.

The move won't ap­ply to em­ploy­ees based in Rhode Is­land and Mas­sachusetts, who weren't el­i­gi­ble for the ex­tra pay ow­ing to state em­ploy­ment laws, Ros­siter said. The re­tailer has 49 stores in Mas­sachusetts and 10 in Rhode Is­land as of this month, ac­cord­ing to its web­site. The change will take ef­fect at Wal­Mart stores, Sam's Club out­lets and ware­houses.

"We reg­u­larly re­view our com­pen­sa­tion pro­grams and we are con­fi­dent Wal-Mart's pay and ben­e­fits are as good if not bet­ter than other re­tail­ers," Ros­siter said.

Wal-Mart's move re­flects a change in work­place re­al­ity, said Peter Cap­pelli, Di­rec­tor of the Cen­ter for Hu­man Re­sources at the Whar­ton School of the Uni­ver­sity of Penn­syl­va­nia.

"It sig­nals the view that Sun­day no longer has any par­tic­u­lar sig­nif­i­cance for most em­ploy­ees as a spe­cial day that re­quires ex­tra com­pen­sa­tion," he said.

The de­ci­sion rep­re­sents a blow to hourly work­ers, said Do­rian War­ren, an as­sis­tant pro­fes­sor of in­ter­na­tional and pub­lic af­fairs at Columbia Uni­ver­sity who stud­ies la­bor re­la­tions.

"It amounts to a huge wage cut," said War­ren. "Wal-Mart has been un­der­per­form­ing fi­nan­cially rel­a­tive to its com­peti­tors and needs to find quick ways to shore up prof­its."

The re­tailer has also switched to mak­ing in­cen­tive pay­ments to hourly em­ploy­ees on a quar­terly ba­sis in­stead of an an­nual one, and plans to in­crease the dol­lar amount in the bonus pool, Ros­siter said. The com­pany's head­count in the U.S. has stayed sta­ble at about 1.4 mil­lion since Jan­uary 2008, ac­cord­ing to reg­u­la­tory fil­ings. 401(k) Changes Store la­bor is Wal-Mart's biggest cost, U.S. stores chief Bill Simon said in Novem­ber. A month be­fore that, Wal-Mart said it plans to end profit-shar­ing con­tri­bu­tions next year, re­plac­ing them with matches to em­ployee 401(k) re­tire­ment plans to bring down ben­e­fits costs. Some money saved from the switch will go to­ward bonuses for store em­ploy­ees, the com­pany said.

"The com­pany is ob­ses­sive about la­bor costs, not just to save money in the com­ing quar­ter but to en­cour­age turnover, which also keeps wages low," Nel­son Licht­en­stein, a pro­fes­sor at the Uni­ver­sity of Cal­i­for­nia, Santa Bar­bara and author of "The Re­tail Revo­lu­tion: How Wal­Mart Cre­ated a Brave New World of Busi­ness," said in an e-mail mes­sage.

Wal-Mart rose 60 cents to $55.09 yes­ter­day in New York Stock Ex­change com­pos­ite trad­ing.

The stock had gained 3.1 per­cent this year be­fore to­day, com­pared with a 9.7 per­cent in­crease in the Stan­dard & Poor's 500 In­dex. -Bloomberg

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.