Most U.S. workers lack paid parental leave, with only 13% of private employees having access in 2016, according to the Bureau of Labor Statistics.
But now, the situation may be changing with major corporations including Chipotle Mexican Grill (NYSE:CMG) and Walmart (NYSE:WMT) planning to use some of the cash freed up from the tax overhaul to boost benefits.
With expected savings from the reduction of the corporate tax rate to 21% from 35%, these companies are using the extra cash to sweeten parental leave policies.
Chipotle Mexican Grill
When Chipotle Mexican Grill announced that it would increase benefits to workers as a result of expected tax reform savings, the company said that it would provide additional paid parental leave for everyone, from hourly managers to salaried employees.
This parental leave benefits are part of Chipotle’s increased benefits to its workers in the wake of tax reform. Chipotle said it will invest more than one-third of its anticipated savings from tax reform on behalf of its employees, with the remainder invested into improving its restaurant facilities and operations.
When announcing increased benefits to employees thanks to tax reform, CVS (NYSE:CVS) said that effective April 1, full-time employees who become parents can take up to four weeks off and receive 100% of their pay.
The company expanded its parental and maternity leave policy and will provide full-time hourly associates in the U.S. with 10 weeks of paid maternity leave and six weeks of paid parental leave. Salaried associates will also receive six weeks of paid parental leave.
Walmart will also provide financial assistance to associates adopting a child. The adoption benefit available to both full-time hourly and salaried associates will total $5,000 per child and may be used for expenses related to adoption. Walmart said the changes will take place in February.
When releasing the details of its sweetened employee compensation and benefits following tax reform, Doug McMillon, Walmart president and CEO said: “We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders. However, some guiding themes are clear and consistent with how we’ve been investing -- lower prices for customers, better wages and training for associates and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”