Amazon is raising minimum wage to $15 for hourly employees in the United States and United Kingdom. And while some have lauded this as good news, it may end up harming, not helping, workers’ bottom line over time.
In a blog post published Tuesday, Amazon noted it is doing away with employee incentive pay including monthly bonuses, as well as stock option awards. By eliminating bonuses to pay for the raises, hourly employees, including warehouse workers and Whole Foods employees, could very well end up making less money over time.
Some hourly Amazon workers told Yahoo News that the bonus cuts would negatively impact their overall take-home pay, as they’ve worked for the e-commerce giant for over two years and already make close to $15 an hour. Amazon has said it would raise pay for workers already making close to its new minimum wage. But even gaining an extra dollar an hour, those workers say, won’t make up for the thousands they will lose in incentives each year.
In the blog post, Amazon explained the decision to cut one type of income for another, noting, “We’ve heard from our hourly fulfillment and customer service employees that they prefer the predictability and immediacy of cash to [restricted stock units known as] RSUs.”
In the past, hourly Amazon employees have been granted one share of Amazon stock at the end of each year they work for the company, with an additional share awarded after five years. Right now, each share is worth about $1960. Employees can cash in shares they hold for two years tax-free, according to The Guardian.
Amazon did not immediately respond to Coins2Day‘s request for comment. The company is the second-largest private-sector employer in the United States.