Target will permanently raise its starting wage to $15 an hour next month and offer one-time bonuses of $200 to its front-line store and distribution-center workers who have helped the retailer stay open throughout the coronavirus pandemic.
With the permanent pay bump, benefit increases and safety investments such as personal protective equipment — plus a $1 million donation to the Target Team Member Giving Fund — the Minneapolis-based retailer said it is spending $1 billion more in pay and benefits than it did last year.
Target had already temporarily raised its $13 minimum wage by $2 in March, a pay bump that has been extended twice in recent months as team members worked to fulfill orders and keep stores stocked during the coronavirus crisis.
The permanent change is making good on a goal Target leadership announced in 2017 to gradually increase its starting pay to $15 an hour, a payout that affects about 275,000 of its employees at stores and distribution centers across the country.
Beginning this week, Target is also offering free virtual doctor visits through the end of the year to all employees regardless of whether they purchase insurance through the retailer, it said Wednesday.
In addition, Target is extending other COVID-19-related benefits including free backup care for children or other family members through the end of August and a 30-day paid leave for team members who are 65 or older, pregnant or those with underlying medical conditions.
“In the best of times, our team brings incredible energy and empathy to our work, and in harder times they bring those qualities plus extraordinary resilience and agility to keep Target on the forefront of meeting the changing needs of our guests and our business year after year,” said Brian Cornell, chief executive of Target Corp., in a statement Wednesday.
“Everything we aspire to do and be as a company builds on the central role our team members play in our strategy, their dedication to our purpose and the connection they create with our guests and communities.”
The pay increase will go into effect July 5. All U.S. hourly full-time and part-time team members at stores, distribution centers and the Minneapolis headquarters will be eligible for the pay bump.
The one-time $200 bonus will be given at the end of July to eligible full-time and part-time hourly employees at stores and distribution centers. Bonuses of $250 to $1,500 were paid out in April to around 20,000 department heads.
In 2017, Minneapolis became the first Midwestern city to adopt a $15 per hour minimum wage, which will be phased in over several years. St. Paul passed a $15 per hour minimum-wage requirement in 2018.
The federal minimum wage is $7.25 per hour, which hasn’t been updated since 2009. Over recent years there has been a push nationally to raise the federal minimum wage as some cities and states have started to increase minimum wages on their own.