Starbucks uses tax cuts to boost wages, benefits

The world’s largest coffee chain is adding new perks for its employees in the wake of the U.S. tax cuts, announcing a wage increase and one-time bonus in the form of a stock grant, just as dozens of companies have done in recent weeks.

Yet it is also expanding paid sick leave and parental leave for many new dads, adding its name to the much smaller but growing list of companies using the recent tax cuts to expand benefits for workers. Disney said Tuesday it would be investing an initial $50 million into a tuition benefit for hourly employees, in addition to making a one-time bonus. Walmart said last week it would expand paid family leave for hourly workers. Firms like Visa and Nationwide Mutual Insurance said they would be offering higher matches in 401(k) plans.

Cutting such benefits in the future can be awkward for companies to pull back — even if simpler than trimming base pay — and could have a more lasting effect than a one-time bonus. New perks also allow companies to try to stand out among a crowded and increasingly competitive labor market by offering benefits that may pique the interest of workers or help retain them.

A new perk allows Starbucks employees, which the company calls “partners,” to accrue one hour of paid sick leave for every 30 hours worked, extending a benefit that had previously only been offered to employees where state law required it.

Starbucks also announced Wednesday it would add six weeks of paid parental leave for its hourly employees who become new dads, a benefit that had only previously been offered to new mothers and adoptive or foster parents.

The company also said it would spend $120 million on giving workers a wage increase in April and $100 million on making a stock grant to workers. Starbucks will announce its quarterly earnings today.