January 24, 2018 / 10:43 PM / 3 months ago

CORRECTED-UPDATE 1-Starbucks to boost pay, benefits after U.S. lowers corporate taxes

(Corrects last paragraph to show median pay for hourly associate managers)

By Lisa Baertlein

LOS ANGELES, Jan 24 (Reuters) - Starbucks Corp will use some of the savings from the new U.S. corporate tax cuts to give domestic employees pay raises, company stock and expanded benefits with a combined worth of more than $250 million, the company said on Wednesday.

With the announcement, the world’s biggest coffee chain joins companies like Walmart, Apple Inc, Comcast Corp and American Airlines Group Inc in sharing tax savings with employees.

Starbucks is known for giving its workers, which it calls “partners,” more generous pay and benefits than other mass-market restaurants and retailers.

Starbucks declined to say how much it expected its tax bill to drop under the new plan, and said executives would give details on its earnings call on Thursday.

Credit Suisse analyst Jason West recently estimated that Starbucks’ global tax rate could fall to about 24-25 percent from around 33 percent, which would drive roughly $425 million in annual tax savings.

Seattle-based Starbucks said it will give hourly and salaried employees, who received pay raises in January, a second wage increase in April.

It is giving additional stock grants to eligible employees on April 16. Coffee shop workers will receive a grant of at least $500 and store managers will receive $2,000 grants.

Starting July 1, all employees will accrue paid sick leave and time to care for ill family members. It also expanded its parental leave policy for cafe workers, giving non-birth parents up to six weeks of paid leave when welcoming a new child.

Employees say they appreciate the benefits that Starbucks offers, but for many, those perks take a back seat to wages.

“This is about take-home pay,” said Jaime Prater, 41, who makes $15.25 per hour, at the high end of the local scale, as a shift supervisor in Rancho Cucamonga, California.

Starbucks and other chains have been raising starting pay due to state and local minimum wage laws, but workers say there has been a downside.

Several experienced Starbucks employees have told Reuters they are frustrated that there is little to no difference between their pay and that of newly hired “baby baristas,” or entry-level workers at Walmart.

Starbucks declined to say how it would distribute the raises.

Prater, who has advocated for colleagues in the past, is now lobbying for increases for Starbucks managers. Assistant store managers earn a median hourly wage of $16.40, according to PayScale, an online salary, benefits and compensation information company. (Reporting by Lisa Baertlein in Los Angeles; Editing by Himani Sarkar and Alistair Bell)

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