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Workers will earn more under new pay plan, says Amazon

Washington

AMAZON sent a letter to Senator Bernie Sanderson on Tuesday vowing that all of its hourly US workers will be better off financially after its new pay policy goes into effect on Nov 1.

"All hourly operations and customer service employees will see an increase in their total compensation as a result of this announcement," wrote Jay Carney, Amazon's senior vice president for global corporate affairs, in a letter to Mr Sanders obtained by The Washington Post.

Amazon, America's second largest employer, announced last week that it would boost its minimum wage to US$15 for all of its hourly workers who labour in fulfilment centres, return centres and other sites. But workers at some Amazon warehouses didn't clap or cheer when they heard the news because the company simultaneously took away bonuses and stock grants. (Amazon Chief Executive Jeff Bezos also owns The Post).

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Many workers told The Post, the New York Times, The Huffington Post and other outlets that they believed they would make less money under the new rules than they do now, prompting Mr Sanders to ask Amazon to confirm that all employees would see an increase in total compensation after the changes take effect.

"Again, all hourly operations and customer service employees will see an increase in their base pay, as well as in their total compensation," Mr Carney wrote. "We are also proud to continue to provide our industry-leading benefits, including comprehensive healthcare, up to 20 weeks of paid parental leave and our Career Choice programme, which pre-pays 95 per cent of associates' tuition for courses in high-demand fields." Mr Carney said that the increase in the hourly wage "more than compensates" for the phase-out of incentive pay and stock grants, and reiterated that the company is eliminating these because workers want more "immediate and predictable" compensation.

Workers who have been with the company for several years are still trying to understand how Amazon is going to ensure they earn more now. Employees who currently earn US$14.01 or more were told they would receive a dollar pay rise, but as one worker at a Tennessee fulfilment centre explained to The Post, he currently earns about 8 per cent extra a month in bonuses.

His base pay is around US$14 an hour, and the extra bonus money for good performance would yield him another roughly US$180 a month and even more during the peak holiday season from October to December. After the changes, he would only earn US$160 extra a month from the dollar pay raise. Amazon is also stopping its practice of giving workers a quarter raise every six months, effectively creating a lower ceiling on how much veteran employees can earn.

He will also no longer receive stock grants, which vested after three years with the company and were a substantial benefit to long-term employees since the company's stock is worth almost four times what it was in September 2015.

The worker, who asked not to be named out of fear of retribution, said he was "disappointed" and called this a "downturn of events". He added that morale was "shot" among veteran employees.

Amazon told Mr Sanders it plans more outreach to help employees understand how the changes will affect them personally and how they will be better off.

Mr Sanders, who berated Mr Bezos repeatedly for underpaying his employees, praised Amazon after the minimum wage increase and said it "could well be a shot hear around the world" that causes other large companies to follow suit.

Amazon's US$15 pay is significantly above typical retail pay in the United States but remains below median warehouse worker pay of $15.53 an hour, according to Labor Department data. WP