(Wal-Mart corrects to say it raised entry-level salaries from
$45,000 and not $47,746)
By Daniel Wiessner and Nandita Bose
Oct 11 Wal-Mart Stores Inc has raised
salaries for entry-level managers before a rule change that
extends mandatory overtime pay to more than 4 million U.S.
workers, in an attempt to shield itself from unpredictable
additional costs for salaried employees.
Wal-Mart raised salaries from $45,000 to $48,500 annually
for employees including store management, spokesman Randy
Hargrove said on Tuesday. The retailer did not break out the
number of employees who received the raise.
The new Obama administration rule, set to take effect Dec.
1, will require employers to pay overtime to salaried workers
earning less than $47,500 a year, double the current threshold
"We think the starting rate of $48,500 a year ... would make
a lot of business sense for our company," Hargrove said.
Wal-Mart is the largest private employer in the United
States and employs 1.5 million workers, which includes store
staff, store management and truck drivers.
The managerial raises went into effect in September when
Wal-Mart paid more than $201 million in second-quarter bonuses
to hourly store staff as 99 percent of its stores met targets
for cleanliness, faster checkout and better service.
Earlier this year, Wal-Mart increased entry level wages to
$10 an hour and in December 2015 said it would invest $2.7
billion in employee compensation and training over two years.
These increases come at a time when the retailer is cutting
back-office jobs and announced the elimination of about 7,000
positions, mostly in accounting and invoicing at its U.S.
The new overtime rule is likely to touch nearly every sector
of the U.S. economy, with the biggest impact on retail,
hospitality and restaurants.
Last month, officials from 21 U.S. states filed a lawsuit
claiming the new overtime rule will place a heavy burden on
state budgets. The U.S. Chamber of Commerce and other business
groups also filed a separate challenge to the rule in the same
Business groups have said the rule will force employers to
demote some salaried management workers to hourly positions and
create more part-time jobs that do not offer benefits.
Only 7 percent of full-time salaried employees are currently
eligible for overtime pay down from 62 percent in 1975,
according to the Department of Labor.
(Reporting by Nandita Bose in Chicago; Editing by Andrew Hay)