Amazon has been criticised for slashing benefits for UK warehouse workers, offsetting at least half of a big pay rise announced this week.
The removal of employee share and incentive schemes could cost thousands of workers £1,500 in a single year, according to the GMB union, which accused the online retailer of imposing “a stealth tax on its own wage increase”.
The changes emerged after Amazon – which has been heavily criticised for its treatment of its lowest paid workers – won plaudits for announcing on Tuesday that it was increasing minimum pay in the US and UK. Minimum pay for permanent and temporary staff in the UK will rise by £1.50 an hour to £9.50 outside London and by £2.20 to £10.50 in the capital.
The retailer’s warehouse workers currently receive one Amazon share, worth $1,961 (£1,508), at the end of every year they work at the company, and an additional share once every five years. If they hold on to the shares for two years, they can cash them in tax free, according to the GMB.
The loss of that payout would be equivalent to roughly half the £3,120 rise in pay promised to the average Amazon warehouse worker outside London. These workers currently earn about £17,000.
The GMB said that staff will also no longer be eligible for cash bonuses they can currently earn if they meet productivity and attendance targets over the peak Christmas trading period. Amazon denied that such a bonus scheme existed.
Tim Roache, the GMB’s general secretary, said Amazon had not said “a dicky bird about cutting staff benefits” when the new hourly pay rates were announced.
Roache added: “This is a basically a stealth tax by the employer on its own wage increase – a clear case of robbing Peter to pay Paul.
“If Jeff Bezos – the richest man in the world – really wants to give hardworking staff a pay rise, he should let them keep their share options as well as increasing their hourly rate.”
Amazon confirmed the incentives were being withdrawn, and on a blog post explaining the changes to staff, the company said it had made the changes because “hourly fulfilment and customer service employees [said] that they prefer the predictability and immediacy of cash [to share bonuses]”.
It said it would be phasing out share bonuses and would replace them with a sharesave scheme, which allows employees to buy shares at a discount over three or five years.
The company added: “The significant increase in hourly cash wages more than compensates for the phase out of incentive pay and RSUs. 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.”
In the UK, the company is keen to increase its appeal to potential employees as a slowdown in the number of EU workers arriving since the Brexit vote, together with record job vacancies, has made it harder for companies to find staff.
On Wednesday, the Tesco boss, Dave Lewis, said Amazon was “catching up” to the supermarket’s pay rates for its warehouse workers. He said Tesco pays more than Amazon’s new hourly rate in nine of its distribution centres and an average £9.83 an hour across 12 close to the online retailer’s facilities.
