Retailers

Bye-Bye Bonus Pay?

Some retailers are discontinuing 'hero pay' as business stabilizes
Photograph courtesy of Kroger Co.

As retailers begin to adapt to the new normal of additional sanitation practices and fewer out-of-stocks, some are also phasing out temporary pay raises that were instituted as a response to the pandemic.

Last week, The Kroger Co. revealed plans to discontinue its extra $2 an hour pay rate, effective May 17. The pay raise was instituted on March 29 and was originally set to run through April 18, but it was extended twice more. The Cincinnati-based retailer also paid front-line staff a one-time bonus of $300 for full-time workers and $150 for part-timers in the height of the pandemic.

“As we start on the path to recovery, our Hero Bonus premium will end on May 16,” Kroger stated in a local news report. “In the coming months, we know that our associates’ needs will continue to evolve and change as our world responds and recovers. Our commitment is that we will continue to listen and be flexible in order to make decisions that balance what is best for our associates, customers, communities and the sustainability of our business.”

The United Food and Commercial Workers (UFCW) International Union blasted the move and initiated an #EssentialHeroes social media campaign asking the company to retain its “hero pay.” Kroger said it was in talks with local unions about keeping its workers safe and healthy.

Essential Workers?

Bonuses and other temporary hourly rate adjustments swept the industry in March as grocery stores were deemed essential businesses and dealt with unprecedented demand that emptied shelves and triggered massive sales lifts and need for additional workers. Workers, in the meantime, were asked to put their personal health on the line to help keep Americans fed, especially since these jobs were not traditionally dangerous. Many retailers, including Kroger, have worked with the UFCW to classify grocery workers as first responders in an effort to get them priority access to personal protective equipment such as gloves and face coverings.

“Are we essential or are we sacrificial?” a co-worker asked Jeff Reid, who works in the meat department at a Giant Food grocery store in Silver Spring, Md., and is the shop steward at the store for the UFCW Local 400, in a report by Good Morning America.

Tiered Bonuses

DeCicco & Sons in Westchester County, N.Y., implemented a tiered scale that was based on the percentage of sales over the base week. For weeks that saw sales up to 25% greater, employees received an hourly bonus of $2 for regular hours and $4 for overtime. For sales that were 26% to 45% higher, employees received $3 an hour more for regular hours and $6 an hour more for overtime and for weeks that saw a sales increase of more than 45%, employee pay increased $4 an hour for regular time and $8 an hour for overtime.

“The bonus is based this way because we are, one company, one team, working together to help, care and protect each other,” noted a letter of appreciation that was sent out to staff announcing the changes.

DeCicco & Sons' original pay increase was set to expire May 8 but has been extended to the end of the month, noted CEO John DeCicco Jr. “We will look at the situation at the end of May, and whether or not we will continue into June,” he said. “We still have a lot of employees out. It wound up being pretty good for the employees, almost $175 extra per week per full-timer with a little overtime.”

He also indicated that team members were paid per the company’s highest tier ($4 extra for regular time) each week as the stores were heavily shopped. As for whether the pay increase would be permanent, DeCicco said the staff received a significant pay increase last year, but said he is thinking about implementing a bonus program once the pandemic pay ends.

Bonus Extensions

Albertsons Cos., which announced a pay increase of $2 per hour effective from March 15, noted that it will evaluate the situation on an ongoing basis and make changes as necessary. The company has made no announcement of when the bonus pay may end.

Natural Grocers by Vitamin College also instituted a $2 an hour pay increase through May 31 and last month stated that $1 of the raise would be permanent.

H-E-B extended its “Texas Proud Pay” until at least May 24. The $2 an hour pay increase was implemented March 15 and originally set to expire after a month before being extended several times to its latest date. “Texans rely on H-E-B and we rely on our great Partners,” H-E-B said in a statement. “We understand it is our responsibility to provide essential services to our customers during a time when so many other businesses have not been able to stay open or have had to scale back operations significantly. H-E-B Partners come together during times of crisis to take care of each other and our customers. This is the spirit of H-E-B.”

For other retailers, such as Target and Brookshire Grocery, the pay boosts have been extended into mid- or end of May, but they have yet to make any announcements on whether the increases would continue or be allowed to expire.

Walmart has rewarded its workers through pulled-forward bonuses that have totaled more than $365 million since the onset of the pandemic.

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