CVS Health Corp. unveiled improvements to its employee benefits programs worth $425 million on Feb. 8, including a plan to raise its minimum wage to $11 an hour, citing savings from recent U.S. tax reform.
The drug retailer will also allow full-time employees to take up to four weeks of parental leave at full pay and hold off on increasing the premiums that employees pay for health insurance during the 2018-2019 plan year, according to a statement from CVS. The changes will take effect in April.
The Woonsocket, R.I.-based company said the investments were made possible by a lower tax rate enacted as part of the Tax Cuts and Jobs Act, which President Donald Trump signed into law in December 2017. CVS Health said Feb. 8 in its fourth-quarter earnings release that its total savings from the tax reform will be $1.2 billion in cash benefits.
CVS added that it expects to spend the remaining tax savings on data analytics investments, care management solutions, and initiatives to improve health outcomes and lower costs for patients as well as to cut debt related to its proposed purchase of health insurer Aetna Inc.
During a call to discuss the company's fiscal fourth-quarter and full-year 2017 financial results, President, CEO and Director Larry Merlo said the company also plans to pay for additional labor in its stores as it adds new services, including new offerings through its MinuteClinic medical treatment centers.
The changes at CVS are the latest that a major retailer has attributed to U.S. tax reform. Since the beginning of 2018, retailers including Walmart Inc. and The Home Depot Inc. have said they will make additional payouts to employees.
