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Target Hikes Minimum Pay to $15, Offers Extra Team Benefits

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Target Corporation (TGT - Free Report) has announced a host of initiatives to boost its team’s morale. Apparently, the big-box retailer intends spending roughly $1 billion more from last year toward the well-being and safety of its team. Effective Jul 5, management will permanently increase the starting wage for U.S. team members to $15 per hour, up from $13 in June last year. Notably, the company had set the goal of increasing its minimum wage in September 2017, and announced plans to increase minimum wage to $15 by the end of 2020. The company’s entire U.S. hourly full-time and part-time team members across stores, distribution centers and headquarters are eligible for the new raise.

Impressively, the latest minimum wage of $15 puts Target ahead of biggies like Walmart (WMT - Free Report) , whose starting wage stands at $12 an hour. Also, the company’s new raise positions it alongside e-commerce king, Amazon (AMZN - Free Report) . Target has also announced a temporary $2 wage increase amid the coronavirus crisis.

Target’s latest updates also include a $200 one-time recognition bonus to the frontline store and distribution center hourly staff in order to highlight their efforts throughout the COVID-19 pandemic. This bonus will be distributed at July end to eligible full-time and part-time hourly staff members across the stores and distribution centers. In April, Target paid bonuses of $250-$1,500 to its 20,000 hourly store-team leads supervising departments in its stores.

Moreover, it has been offering free access to virtual doctor visits to its entire team members through 2020 end, irrespective of whether they have presently subscribed to the company’s health-care plan. This offering is done via the CirrusMD app. Additional extensions of a 30-day paid leave for vulnerable staff, including those who are 65 or older, pregnant or members with underlying medical conditions. It will continue providing free counseling sessions to support its staff's mental health. Also, a no-cost backup care for workers’ family members will be provided through August. Furthermore, management has announced to continue waiving the absenteeism policy with paid-leave options for coronavirus-affected workers.

Last week, Target announced a 3% dividend hike to 68 cents a share from the prior payout of 66 cents. The latest dividend will be paid out  on Sep 10, 2020 to shareholders of record as of Aug 19.  Impressively, this hike marks Target’s 49th successive year of dividend increase.

Over the past year, shares of this Minneapolis, MN-based company have increased 36.8% compared with the industry’s 12.7% rise. Target currently has a Zacks Rank #3 (Hold).


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