| WASHINGTON, D.C. – CVS announced healthy raises and new benefits for their 240,000 employees because of the Tax Cuts and Jobs Act today. The company will raise its hourly minimum wage from $9 to $11 and will upwardly adjust the pay rates for its retail pharmacy technicians, front store associates, and other hourly retail employees. Additionally, full-time employees will now qualify for as much as four week of paid parental leave.
The list of companies announcing pay raises, bonuses, increased investments, and additional hiring is longer than a CVS receipt, with over 300 and counting passing the savings they see under the Tax Cuts and Jobs Act directly to their employees.
This will be a bitter pill for every single Congressional Democrat to swallow, as they all voted against the higher paychecks and benefits millions of workers are now seeing. Though Democrats now won’t answer whether they would try to repeal the Tax Cuts and Jobs Act, there’s no way to put a band-aid on their position in favor of the government taking more money out of workers’ paychecks.
To see CVS’ full announcement, click here or see below.
To see the growing number of companies increasing wages, investments, jobs, and bonuses because of the Tax Cuts and Jobs Act, click here.
CNBC: CVS to hike wages, introduce paid parental leave with windfall from new tax law
By Angelica LaVito
February 8, 2018
CVS Health will increase employee pay and sweeten benefits to some employees using a portion of the company’s windfall from the new tax law.
CVS will boost starting pay for hourly employees to $11 per hour from $9 per hour, starting in April. Pay ranges and rates will be adjusted for many of its retail pharmacy technicians, front store associates and other hourly retail employees later in the year. Full-time employees will qualify for as much as four weeks of paid parental leave, and worker health-care premiums will hold steady at current rates.
The health-care company has more than 240,000 employees.
Retailers have started hiking their minimum wages to remain competitive in a tightening labor market. Numerous big names have announced raises and added benefits since President Donald Trump signed the Tax Cuts and Jobs Act in December.
Walmart, the world’s largest private employer, last month said it would increase its starting pay to $11, give one-time bonuses to some employees and expand its parental and maternity leave policy.
CVS’ stores are key to its proposed $69 billion acquisition of health insurer Aetna. The pair want to create an integrated health system that combines pharmacy and health benefits while delivering preventive care services through the drugstore chain’s retail clinics. Shareholders are slated to vote on the deal on March 20.
The news came as CVS reported its fourth-quarter results, which were better than analysts expected on both the top and bottom line.
Net income in the latest quarter rose to $3.29 billion, or $3.22 per share, from $1.71 billion, or $1.59 per share, in the year-earlier quarter.
Earnings in the latest period, included a $1.5 billion benefit related to the new tax law. After stripping out special items, such as the tax gain and a $56 million charge related to the proposed acquisition of Aetna, the company earned $1.92 per share, above analysts’ estimates of $1.89 cents per share.
CVS’ revenue grew 5 percent to $48.39 billion from $45.97 billion in the year earlier. Its pharmacy services revenue surged 9.3 percent from the year-ago quarter, reaching $34.15 billion, up from $31.26 billion.
Same-store sales for the pharmacy chain’s front store, which doesn’t include pharmacy, dipped 0.7 percent in the quarter, though a particularly bad cold and flu season helped boost traffic a bit.
“As much as CVS is forward thinking and innovative in health, it is an extraordinarily unimaginative and backward-looking retailer,” said Neil Saunders, managing director of GlobalData Retail. “This is one of the reasons why front of store sales are still in negative territory despite very weak prior year comparatives and a boost to sales from remedies for a particularly nasty flu and cold season.”
Shares of CVS fell 0.4 percent after rising in premarket trading following the announcement.
CVS said the employee investments will total about $425 million annually. This spending includes the wage increases and improved benefits.
The company also anticipates spending at least $275 million of the tax windfall on investments in the business, including data analytics, care management solutions and pilot programs.
As a result of these investments, the company expects operating profit for the year to be in the range of down 1.5 percent to up 1.5 percent. Previously, CVS expected growth between 1 percent and 4 percent.
For the first quarter, CVS now anticipates operating profit growth between 0.5 percent and 4.5 percent.
CVS expects the tax law changes to add $1.2 billion to its cash flow. |