CVS to Raise Starting Pay to $11 an Hour
By Sharon Terlep
CVS Health Corp. said it will use some of the extra cash from the U.S. tax overhaul to raise its starting hourly pay to $11 for U.S. workers, the latest company to announce employee perks in the wake of the legislation.
The company, with 240,000 U.S. workers, currently pays a starting wage of $9 an hour, though many employees make more. It said that in addition to raising the minimum, it will increase pay for lower-wage retail workers at its nearly 10,000 U.S. stores. CVS didn't provide an average increase.
A tight labor market has driven up competition for unskilled hourly workers. Walmart Inc., the country's biggest private employer, said last month it would lift its starting pay to $11 an hour. Several states and municipalities already have a minimum wage at or above $11 an hour.
CVS also will offer all full-time employees four weeks of paid parental leave and will freeze employee health premiums for the coming year. About 100,000 workers are enrolled in CVS's employee health plan.
The moves are expected to cost $425 million a year. The company said last month it expects the tax changes will boost cash flow in 2018 by about $1.2 billion.
"We said that we would invest our tax savings back into our business, and that's exactly what we're doing," CVS Chief Executive Larry Merlo said in a statement.
CVS said paying a more competitive wage to retail workers, from pharmacy technicians to cashiers, will bolster efforts to make its stores into health-care hubs. Reinventing its stores is a key cog in CVS's plan to create a vertical health-care system with insurance giant Aetna Inc., which CVS last year agreed to acquire for $69 billion.
Other money from the tax plan will go toward items such as data analytics and pilot programs aimed at improving health outcomes.
Write to Sharon Terlep at email@example.com
(END) Dow Jones Newswires
February 08, 2018 07:29 ET (12:29 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.