- Amazon will be giving raises of up to $1.25 per hour for workers already making $15 an hour.
- The company will also be giving anniversary bonuses of up to $3,000.
- These changes come after Amazon received backlash for taking away bonuses and stock awards.
Amazon is attempting to reverse course after catching a lot of heat and backlash over raising its minimum wage to $15 for all U.S. hourly employees while quietly sunsetting employee stock awards and bonuses.
From the outside, the wage hike appeared to be a generous move from the company led by Jeff Bezos, CEO, founder, and the world’s richest person. Amazon employees were quick to voice criticism, however, as it appeared that some employees would actually make less under the proposed wage changes due to the loss of stock awards and bonuses. Now, Amazon is adding more raises and bonuses to compensate for the change.
Click to learn why the bonus tax rate is bad news for your tax refund.
Newest Amazon Raises Could Be Worth Over $325M a Year
Amazon has announced that employees already making $15 an hour will likely see a $1.25 bump to $16.25 an hour starting Nov. 1, almost 2 1/2 times more than the national minimum wage of $7.25. This means that under the new plan, a worker could see up to an extra $2,600 annually.
Amazon hasn’t released the number of employees already making $15 an hour who could receive this wage bump, so how much the increase will cost the company is unclear. The first wage hike from $11 to $15 applied to 350,000 employees.
Based on estimated buckets of worker wages, here’s how much the latest wage hike could potentially cost Amazon. All figures are based on working 40 hours per week, 52 weeks a year:
- 50,000 Amazon employees affected x $1.25 per hour increase = $62,500 more paid to employees per hour or $130 million per year
- 100,000 Amazon employees affected x $1.25 per hour increase = $125,000 more paid to employees per hour or $260 million per year
- 125,000 Amazon employees affected x $1.25 per hour increase = $156,250 more paid to employees per hour or $325 million per year
Amazon’s New Bonus Plan Encourages Employees to Stay Long Term
Amazon will now implement anniversary cash bonuses for five, 10, 15 and 20 years of service that will range between $1,500 and $3,000, as reported by Bloomberg.
The company has yet to provide exact bonus amounts that employees will receive when reaching each milestone anniversary, and Amazon hasn’t released roughly how many employees are currently at each anniversary. Given the low and the high ends of both, and an estimate on how many employees are at these milestones, the cost could be:
- 5,000 (estimated number of Amazon employees achieving five-year company anniversary) x $1,500 cash anniversary bonus = $7.5 million annually paid to employees
- 5,000 (estimated number of Amazon employees achieving 20-year company anniversary) x $3,000 cash anniversary bonus = $15 million annually paid to employees
Second Amazon Bonus Could Cost the Company $56M
All workers, regardless of tenure, will be eligible for a $100 bonus for good attendance during the month of December. That $100 bonus alone could cost Amazon over $56 million because the company employs over 560,000 people, as of February 2018.
How Much Amazon Is Now Spending on Raises and Bonuses
An estimated 350,000 U.S.-based Amazon warehouse workers will be seeing a $4 bump from $11 to $15 an hour, which will cost the company an extra $1.4 million per hour or $2.9 billion per year based on a 40-hour work week for those employees. With these newest raises and bonuses, if the maximum estimates presented here hold true, the company could end up paying over $403 million more each year to employees.
Click through to read about what top CEOs receive in salary and other perks.
More on Making Money in Business