Exclusive: Amazon raises overtime pay for warehouse workers

(C) Reuters.

By Krystal Hu and Rebekah Mathew

(Reuters) – Amazon.com Inc (NASDAQ:AMZN) said on Saturday it is raising overtime pay for associates working in its U.S. warehouses, as the world’s largest online retailer tries to meet the rapidly growing demand for online shopping from consumers stuck at home during the coronavirus outbreak.

Hourly workers at the warehouses will receive double pay after 40 hours for overtime, up from the 1.5-times rate, from March 15 to May 9, the announcement said.

“We understand the past few weeks has been a very challenging time,” Amazon told employees in an internal announcement on Saturday seen by Reuters. “We want to continue to support you during this time where many services you might depend on are no longer available due to closures.”

This is the second time the e-commerce giant announced an improvement in pay for its workers in a week. On Monday, Amazon hiked the hourly rate for associates to $17 from $15 and announced plans to hire 100,000 warehouse and delivery workers in the United States as the virus outbreak boosts online orders.

Additionally, all part- and full-time hourly team members at Whole Foods Market stores and facilities will receive double their regular hourly base rate of pay for every overtime hour worked in a workweek from March 16 through May 3, 2020, the national food retailer said in an emailed statement on Saturday.

Lawmakers have urged companies to do a better job protecting workers, especially those at warehouses and grocery stores who do not have the luxury of working from home and who are now on the frontlines battling against the further spreading of the virus. They bear a higher risk to their health while continuing to fulfill supplies Americans need to survive while staying indoors.

“We continue to see increased demand from customers to have products delivered to support social distancing in their communities,” Amazon wrote to employees. “Making that possible means that some of us must work to keep good flowing.”

Just hours before Amazon’s Saturday announcement, four Democratic U.S. senators, including Cory Booker and Bernie Sanders on Friday expressed concern in a letter to Amazon’s Chief Executive Jeff Bezos that the world’s largest online retailer has not taken enough measures to protect its warehouse staff. They specifically asked if the company would provide “time-and-a-half” hazard pay for its workers.

Other businesses have also acted. HEB, a Texas-based grocery chain with 140,000 employees in Texas and New Mexico on Friday said it raised workers’ pay by $2 an hour through April 12 that went into effect on Monday.

Amazon has offered unlimited unpaid time off to encourage employees to stay home if they don’t feel well, which could contribute to higher-than-usual absence rate in the warehouses. It has also staggered workers shifts and prohibited them from sitting next to each other in the lunchroom to limit contact.

Amazon on Thursday reported its first warehouse employee in the United States tested positive for the virus, forcing the company to temporarily shutter a warehouse in New York.

As the virus spreads across the United States, several clothing retailers and department-store chains have shut stores and cafe and restaurant operators have closed down or limited services to delivery and take-away.

Online retailers and grocery stores are trying to capture rising demand as more Americans are ordered to stay at home to reduce the spread of the outbreak.

Rival retailer Walmart (NYSE:WMT) Inc said on Thursday it plans to hire 150,000 hourly associates in the U.S. and announced $550 million in cash bonuses to reward workers.

The highly contagious coronavirus has infected more than 274,800 people across the world and led to more than 11,300 deaths globally forcing governments across the world to issue mass lockdowns of people in an attempt to slow the spread of the virus.