Retailers Struggle With Coronavirus Staffing Costs

Employers want to reward workers but face huge increases in expenses.

May 21, 2020

ALEXANDRIA, Va.—Early in the coronavirus quarantine, major U.S. retailers offered extra pay to frontline workers. Some gave a temporary $2 hourly increase, a one-time pay bonus or both. Now, many are ending or planning to stop paying those higher wages to employees in stores, warehouses and on the road, the Wall Street Journal reports.

Amazon, Kroger and Rite Aid are among those stopping the bonus pay, although workers and unions are pushing back, saying they still face extra risks on the job.

“As long as we are wearing gloves, as long as we are wearing masks and social distancing, it seems obvious to me that we are working in hazardous circumstances,” said John T. Niccollai, president of United Food & Commercial Workers Local 464A, in Little Falls, New Jersey. “It is manifestly unfair to eliminate the hazard pay at this point.”

With the temporary raises set to expire, retailers must weigh several factors, including the desire to do right by workers and retain them, as well as the need to control operating costs and stay competitive.

At the beginning of the outbreak, many companies established a kind of “hero pay” to recognize the increased risk frontline workers were taking. The pandemic though, once expected to last only weeks, has turned into months and retail workers still face risk of infection while on the job. Many companies, including c-stores such as Wawa, Kwik Trip, Sheetz, 7-Eleven and others have taken proactive preventative measures to protect employees, including supplying PPE such as masks, gloves, and clear barriers at the register.

Still, until a vaccine is produced or herd immunity is reached, the threat of employees getting infected remains. At the same time, state economies are starting to reopen, and workers are returning to their restaurant and retail jobs.

For retailers, everything is more expensive. While companies have increased minimum wages in many areas, retailers face new expenses, including protective equipment for employees and products to sanitize stores and warehouses. Companies such as Home Depot, Amazon, Target, Kroger and Walmart have all increased pay for workers either via hourly increases or bonuses. Now, they grapple with how long those are sustainable.

Amazon will provide extra pay for warehouse workers through the end of May, instead of ending May 16 as originally planned, and will return to regular wages in June, stating the extra pay was an incentive, not hazard pay, according to an Amazon spokeswoman. Kroger extended a $2 hourly wage increase one final time to May 23 and offered a one-time payment of $400 for full-time staff and $200 for part-time staff.

Meanwhile Target will continue on its $2-per-hour pay increase through July 4 for its more than 350,000 workers, reports GroceryDive.com. In addition, the company will extend its other pandemic-related benefits, including a 30-day paid leave policy for high-risk workers and those 65 years and older, through June 30.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.

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