Even Starbucks Couldn't Ignore Effects of New Tax Bill
The success of the GOP-backed tax reform bill has made its way into the coffee market as Starbucks announced Wednesday that it will provide employees with raises and benefits due to the recently signed tax reform bill.
“Investing in our partners has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant partner investments,” Starbucks CEO Kevin Johnson wrote in a letter to employees.
The Seattle-based coffee company will reportedly provide raises to its employees as well as offer employees a minimum stock grant of $500, while managers at the coffee shop locations will receive $2,000 in stock grants. Access to these stock grants will begin on April 16.
Moreover, hourly and salary employees who received raises in January can rest assured that they will receive another raise come April.
Along with raises and stock grants, employees will now be provided the opportunity to accrue time off to care for sick family members.
The company also announced that starting July 1, it will expand its parental leave policy for cafe workers, providing non-birth parents up to six weeks of paid absence after the birth of a new child.
Starbucks refrained from releasing how much it expects its tax rate to drop as result of the recently signed tax reform bill.
However, according to Credit Suisse analyst Jason West, Starbucks’ global tax rate will potentially drop from 33 percent to 24-25 percent.
As noted by CNBC, this would save the company roughly $425 million in taxes.
Starbucks will now join the long list of multinational corporations that have announced increased employee benefits and wages as result of the tax reform bill.
In December, Boeing, AT&T, Fifth Third Bank, Wells Fargo, Comcast and FedEx all announced that employees would receive increased wages and benefits once President Donald Trump signed the bill into law.
And on Wednesday, Trump tweeted his praise of the “tremendous” investments made by “Disney, J.P. Morgan Chase and many others,” after the companies announced bonuses and benefits for employees due to tax savings.
“Tremendous investment by companies from all over the world being made in America,” Trump wrote. “There has never been anything like it. Now Disney, J.P. Morgan Chase and many others. Massive Regulation Reduction and Tax Cuts are making us a powerhouse again. Long way to go! Jobs, Jobs, Jobs!”
Disney stated Tuesday that they will provide a one-time bonus of $1,000 to roughly 125,000 employees and place $50 million into a fund designed to help employees with college tuition costs, with another $25 million being inserted annually, Bloomberg reported.
The same day, J.P. Morgan Chase announced that they plan to spend $20 billion over the course of five years with the aim of providing 22,000 employees with hourly raises, and opening 400 new locations, creating 3,000 jobs.
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