Walmart is changing its paid time off policies for its employees, and will start paying bonuses to workers who limit their absences.
The goal is to give incentives to workers who show up every day, while building in protections for people who have no choice but to miss work.
Currently, hourly workers can miss up to 9 days every six months for unexpected absences. Walmart is cutting that to 5 under the new policy, which will take effect this weekend. The policy around vacation days is not changing.
On top of the 5 days every six months, workers will start receiving up to 6 days a year of “protected PTO.” Those days can be used to cover illnesses and emergencies, such as a flat tire or taking care of sick kids or family members.
The difference is the protected PTO won’t count against workers’ attendance records. Even workers who take all 6 days can be eligible for the new attendance bonus. They won’t get the bonus, however, if they dip into the pool of 5 additional days every six months.
For example, an entry-level Walmart sales associate making the company’s $11-an-hour minimum wage could mean an additional $550 at the end of a quarter. Hourly store supervisors could make up to $900.
Doubling down on benefits
Walmart, the country’s largest private employer, says 300,000 part- and full-time hourly workers already have attendance records that would qualify them for the new bonuses.
“We have core associates that we want to reward for going above and beyond,” Drew Holler, vice president of associate experience for Walmart US, told CNN Business.
Walmart is doubling down on benefits to attract and keep its top talent. At the same time, it believes the new program won’t add a lot to its costs.
The company faces intense pressure from investors to keep down costs. Last year, Walmart raised the minimum wage for all of its 1.1 million hourly workers.
“Walmart is trying to be creative. Workers are already showing up, and this is not a big cost,” said Stephanie Luce, professor of labor studies at the City University of New York. “It’s a way to make a positive gesture without really breaking the bank.”
Walmart believes the bonuses will boost attendance. The reduction in days off was designed to “drive accountability and raise expectations for that small set of associates that do have an attendance problem,” Holler said.
Unplanned absences disrupt Walmart because workers have to change their routines and pick up the extra slack. That often can trickle down to poor customer service on the sales floor, which frustrates shoppers.
But Eddie Iny, campaigns director for workers’ advocacy group Organization United for Respect, worries about a possible risk with the new attendance incentives: Workers showing up sick to the job.
Walmart has faced criticism and lawsuits for punishing workers for medical- and pregnancy-related absences. OUR Walmart, a campaign run by United for Respect, had circulated a petition online calling on the company to provide at least six days of paid PTO for unplanned sicknesses.
Advocacy group A Better Balance filed a class action lawsuit in New York last year alleging that Walmart’s absence policy discriminated against pregnant workers. Walmart has denied the allegations. The lawsuit is pending.
The company’s new policy seems to be a big improvement, said Dina Bakst, co-founder of A Better Balance. In another statement Friday, she said her organization still had concerns, and added that Walmart “must ensure that no worker is penalized for a lawful absence,” even if they have used all of their allotted paid time off. She said A Better Balance would follow the changes closely.
Wage hike and paid leave
The new policies follow Walmart’s recent efforts to improve pay and benefits for workers.
Last year, in addition to raising the minimum wage to $11 an hour, Walmart expanded paid maternity and paternity leave for full-time hourly workers.
Separately, Walmart revamped its scheduling system to give workers more consistent hours and allow them to swap shifts with coworkers.
Those efforts have helped Walmart bring turnover to a five-year low, Holler said. The company has struggled with high turnover in the past, which is expensive for Walmart because it has to pay to train new workers.
Unemployment in the United States has fallen to its lowest level in decades. As the retail job openings rate remains above the national average, Walmart wants to attract top-tier associates to work for the company.
At the same time, Walmart (WMT) faces pressure from rivals like Target (TGT), which raised its minimum wage to $12 an hour last year and plans to move to $15 an hour by the end of 2020. Amazon (AMZN) announced in October that it would raise its minimum wage to $15 for all US employees.
“It’s a tight labor market and they want to be able to compete for the best workers,” said Laura Kennedy, retail analyst at Kantar Consulting.
Walmart, a frequent target of labor activists, also seems to be trying to get ahead of legislative trends and boost its image.
More cities and states are passing minimum wage legislation and mandating paid leave. In 2017, Oregon became the first state in the country to require that employers give workers their schedules at least a week in advance.
“They would rather have their own policies, rather than be legislated and told what to do,” Luce said.
CNN Business’ Lydia DePillis contributed to this report.