Amazon.com Inc. is eliminating monthly bonuses and stock awards for warehouse workers and other hourly employees after the company pledged this week to raise pay to at least $15 an hour.
Even after the elimination of bonuses and stock awards, hourly operations and customer-service workers will see their total compensation increase, the company said in a statement.
“In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable,” Amazon said.
Warehouse workers for the e-commerce giant in the U.S. were eligible in the past for monthly bonuses that paid workers extra based on their attendance and warehouse productivity. And the company had a restricted stock unit program, which gave shares to workers if they stayed with Amazon for a certain amount of years.
Amazon says it will replace the latter with a program next year that will allow workers to buy stock, but didn't provide details.
The company informed those employees Wednesday that it’s eliminating both of those compensation categories to help pay for the raises, sources told Bloomberg.
Amazon received plaudits when it announced Monday that the company would raise its minimum pay. The pay increase warded off criticism from politicians and activists, and put the company in a good position to recruit temporary workers for the important holiday shopping season.
Workers whose pay was already above $15 per hour will get hourly raises of $1. Some long-time workers expressed frustration that their raises are small compared with newly hired workers who will see hourly pay bumps of as much as 40 percent.
A higher hourly wage that new workers immediately receive is a better recruiting tool in a tight labor market, especially in the warehousing industry that sees high turnover, said David DeBoskey, an accounting professor at San Diego State University. Amazon said it will hire 100,000 seasonal workers for the holiday crush this year, and temporary workers don’t get stock.
“In a tight labor market, when you’re the leader paying $15 an hour, that’s a big advantage,” DeBoskey said.