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Amazon's hourly workers lose monthly bonuses and stock awards as minimum wage increases

CNBC logo CNBC 03/10/2018 Eugene Kim
Amazon warehouse, shipping© Provided by CNBC Amazon warehouse, shipping
  • Amazon warehouse workers are no longer eligible to receive monthly bonuses and stock awards.
  • Amazon made the change as it announced a minimum wage increase on Tuesday.
  • The change could cause some long time workers to make less money, according to The Guardian.

Amazon's minimum wage increase for its hourly workers comes with a trade-off: no more monthly bonuses and stock awards.

Amazon confirmed in an email to CNBC that the company is getting rid of incentive pay and stock option awards as it increases the minimum wage to $15 per hour. The company, however, stressed that the wage increase "more than compensates" for the loss in other benefits.

Related: Amazon slash benefits for UK warehouse workers

"The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and RSUs," Amazon's spokesperson said in an emailed statement. "We can confirm that all hourly Operations and Customer Service employees will see an increase in their total compensation as a result of this announcement. In addition, because it's no longer incentive-based, the compensation will be more immediate and predictable."

Additionally, workers affected by the change will get a chance to review the new pay structures and share any concerns they might have with the company, according to a person familiar with the matter.

The confirmation follows multiple reports on Wednesday that some of Amazon's warehouse employees say they will make less as a result of this change. The Guardian said warehouse workers currently receive one Amazon share (worth $1959) at the end of every year, on top of another single share reward every five years. Yahoo News noted that warehouse workers can earn up to 8 percent of their monthly income every month, which could be as much as $3,000 a year for some workers. Workers were notified of the change on Wednesday, according to Bloomberg

Amazon disclosed in its announcement on Tuesday that it is replacing the stock awards program with the minimum wage increase because employees prefer the "predictability and immediacy of cash" compared to stock awards. The company didn't say anything about the monthly bonuses.

The announcement served as a good publicity event for Amazon, who's recently been criticized for the low wages and poor working conditions at its warehouses. Two of Amazon's biggest critics, Senator Bernie Sanders and the Trump White House, both applauded the move on Tuesday.

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