Wal-Mart Stores Inc., which has been attacked over its pay and benefits, said Monday that it was raising starting wages at a third of its stores but capping the pay of veteran workers.
The nation's largest private employer is rolling out an average pay increase of 6% for new hires at 1,200 Wal-Mart and Sam's Club warehouse stores nationwide, including some of its nearly 200 stores in California.
"This is based entirely on wage surveys in every market where we do business," said John Simley, a spokesman for the Bentonville, Ark.-based company. "The goal is to remain competitive and make sure we don't get behind the envelope."
Wal-Mart is instituting the salary caps to encourage workers to move up through the ranks rather than remain in the same job for years. Employees who earn more than the maximum amount for their job won't see a salary decrease but will no longer be entitled to raises unless they change positions.
The company also said it was increasing performance-based pay raises but declined to say by how much. Overall, the moves will not increase the company's labor costs, Simley said, nor will they result in price increases.
Critics said Monday's announcement did little to change the fact that Wal-Mart pays below the national averages for retailers and has consistently fought efforts to boost workers' standard of living.
Chris Kofinis, of the union-backed group WakeUpWalMart .com, said the salary caps were little more than an effort to get rid of higher-paid veteran employees. "This is a determined attempt to push full-time workers out of this company, and they should be ashamed of themselves."
In California, Wal-Mart said, its average hourly wage was $10.50, compared with $10.11 nationally. California's minimum wage is $6.75 an hour, and Congress is considering raising the rate nationally to $7.25 an hour from $5.15.
The announcement by Wal-Mart comes as the company continues its battles against legislative oversight of how it treats workers.
Last month the Chicago City Council passed an ordinance that would require the nation's largest retailers to pay hourly wages of at least $10, with $3 in benefits, by 2010, despite a vigorous campaign by Wal-Mart against the measure. The ordinance will go into effect Sept. 13 unless vetoed by Mayor Richard Daley, who has criticized the effort as anti-business.
