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Companies are bound by law to offer hourly workers an hourly rate that matches either the federal minimum wage ( $7.25 since 2009) or the minimum wage proposed by the state (whichever one is higher). Considering that the former has not been revised for over a decade despite increasing costs of living, hourly employees are understandably unhappy. With more workers going on strike to demand a higher minimum wage, you’re likely not surprised to see more companies offering higher pay to attract employees.
On top of that, the pandemic went and caused a labor shortage across industries, giving workers the upper hand when it comes to their wages. With these changing circumstances, you need to make sure your hourly rates and benefits are on par.
To help you, we compiled a list of companies that hire hourly workers and details about how they compensate their employees so you can get ideas on how to stay competitive. Honorable mention: Best Buy and their gift of time policy.
1. Costco
In a competitive retail landscape dominated by giants like Walmart and specialized stores like Best Buy, Costco has carved out a unique niche for itself. This isn't just because of its wholesale model that offers a variety of goods at discounted prices. Costco has also set itself apart by focusing on employee well-being, particularly when it comes to hourly wages and benefits.
You may have heard the rumors: "Costco pays $21 an hour!" While that number might not be the standard for all roles within the company, it's not entirely off the mark either. According to a recent press release, the typical pay rate at Costco Wholesale Company hovers around an impressive average of $18.36 an hour. This pay rate varies by role, with an hourly range that spans from $13.67 to as high as $28.96.
What sets Costco even further apart are the roles that command the highest-paying wages within the company. Licensed Opticians, for instance, earn an enviable average hourly rate of $23.55. These rates put Costco ahead of similar membership-based retailers, such as Sam's Club, and even high-paying sectors like banking, represented by institutions like Bank of America and Wells Fargo.
2. Whole Foods
Whole Foods, which became a part of its parent company Amazon in 2017, has consistently been recognized for offering excellent working conditions for its hourly workers. Since its founding in 1988, the company has frequently found its place on Fortune Magazine's 100 Best Companies to Work For—underscoring its reputation as one of the companies that pay high hourly wages and offer numerous employee benefits.
So, what perks does Whole Foods provide for its workforce? Full-time and part-time employees are eligible for a comprehensive healthcare plan, often comparable to benefits offered by companies like Aetna and CVS Health.
Additionally, employees are enrolled in a 401(k) pension plan and receive a 20% discount on any in-store purchases. The company also offers a casual dress code at work, giving it an edge in the job search for many Americans. After a wage increase in 2018, Whole Foods set its minimum pay at $15/hour, making it one of the higher-paying entry-level jobs in the retail sector.
3. Walmart
Walmart, the world's largest company in terms of revenue, has been making strides to enhance the working conditions for its hourly employees. This initiative took a notable turn when the company introduced a one-time $1,000 bonus for its U.S. workforce. Walmart has also revised its parental and maternity leave policies to provide more supportive conditions for employees planning to expand their families.
What are the benefits Walmart employees enjoy? The company offers a standard 401(k) pension plan and provides a 10% discount on store purchases, along with a special Christmas discount for employees. As part of its commitment to offer higher wages, Walmart increased its minimum hourly wage in September 2022 to $12/hour. However, in select stores located in areas with a higher cost of living, such as New York and Washington, the starting pay can climb to as much as $17/hour, making Walmart competitive among companies that pay high hourly wages.
4. McDonald's
Unlike giants like Whole Foods and Walmart, McDonald's has historically struggled to keep all of its hourly workers satisfied. Amid the labor crunch that has hit the fast-food sector particularly hard, the company took corrective action by raising its hourly wages by around 10%.
Currently, a McDonald's employee can expect to earn an hourly wage of over $13, with some locations offering between $11 and $17.
It's worth noting that these adjustments are primarily for company-owned outlets, though franchised locations are under scrutiny to follow suit. The fast-food chain has publicly stated its goal to elevate the average hourly rate to $15 by 2024.
Both full-time and part-time U.S. employees gain access to a 401(k) pension scheme, similar to benefits at Walmart and Whole Foods. The company also extends healthcare benefits, covering areas like dental and vision, making it comparable to organizations like Walgreens and Under Armour. McDonald's also has employee recognition programs designed to boost morale, crediting individual efforts and rewarding valuable contributions to the company's success.
5. Starbucks
The famous coffeehouse is known for the comprehensive benefits it gives to its employees. Exclusively termed “ Your Special Blend ,” Starbucks’ benefits include a 401(k) retirement plan and the opportunity to be a part of its equity reward program, Bean Stock.
One particular benefit that stands out to us is the Starbucks College Achievement Plan, an educational benefit that helps Starbucks employees get a college education, even if it’s unrelated to their work at the company.
Starbucks’ employees currently earn an average of $14/hour. However, the coffeehouse brand will be increasing their hourly wage by next summer to bring the average up to $17/hour, with a new pay floor of $15/hour. This raise comes amidst its chronic understaffing issue caused by multiple factors such as COVID-19 and individuals finding jobs with higher pay. Now, Starbucks is offering jobs with hourly wages that are competitive in the market, positioning itself as an attractive employer not just for its benefits but also for its wages.
6. Chipotle Mexican Grill
Chipotle, the Mexican-styled fast-casual restaurant, has gained much popularity thanks to their focus on providing fresh ingredients and fast service to their customers. Chipotle takes as much care of their employees as they do their customers. And, to hit their hiring goal of 20,000 new employees, the company introduced bonuses for crew members who referred their friends or family to the company.
Chipotle also recently increased their hourly wages to attract more workers. Current starting wages for hourly crew members range from $11/hour to $18/hour, with an average of $15/hour. Chipotle employees enjoy several benefits, including a free meal for every daily shift, medical benefits, and a stock purchase plan for those who’ve been with the company for more than a year. The company also offers employees a 401(k) retirement savings plan after their first year.
7. Chick-fil-A
Chick-fil-A was named one of the fastest-growing QSR brands in the country. And most of this could probably be attributed to its efficient drive-thru kiosks which were all the rage when the pandemic lockdown began. Even with the long queues, customers don’t mind waiting at all thanks to their exceptional customer service.
And how about their hourly rates? As Chick-fil-A’s restaurants are mostly franchises, the wages vary according to the states they’re in. But one thing’s for sure. Most owners intend to increase their hourly rates. One Chick-fil-A franchisee in Sacramento, California recently increased his employees’ wages to $17/hour to $18/hour in order to give them a “living wage.” Another owner from Greenville pays a starting wage of $13/hour along with a revised benefits package that includes paid time off for those who work 35 hours or more in a week. Again, the company also contributes to a 401(k) plan and health insurance for those who’ve clocked in 30 hours or more a week.
8. Target
Target is the second biggest retail brand in the US, right behind Walmart. They offer employees a 401(k) pension plan and three weeks of vacation time each year—and, over time, that increases up to seven weeks a year. The company also recently increased its minimum wage to $15/hour, up from $12/hour in 2018. In addition, they also gave a $200 bonus to frontline workers in light of the pandemic.
So, What Company Pays the Highest Minimum Wage?
After examining the landscape of hourly wages, it appears that Costco leads the pack, followed closely by Chick-fil-A and Whole Foods. Costco sets a powerful example with their typical pay rate averaging around $18.36 an hour. Chick-fil-A franchisees, particularly in regions like California, are also inching upwards, offering rates of up to $18 an hour.
Whole Foods has been consistent with a minimum wage of $15/hour, but what sets it apart is the comprehensive healthcare plan it offers, akin to what one might expect from corporate giants like JPMorgan Chase.
It's important to note that geography plays a role in these wages. For instance, in states like Florida and Ohio, the minimum wage tends to be higher due to state laws or cost of living. Also, some companies like Disney and Apple, although not featured in this list, offer competitive wages and benefits to their hourly employees. IKEA is another company that, while not making our list, has been recognized for offering high wages and benefits to their workforce.
Moreover, with the rise of work-from-home opportunities, some companies are rethinking their compensation packages, allowing for more flexible arrangements that might include other kinds of benefits beyond just the hourly wage.
In a world where the fight for jobs with hourly wages that are livable is becoming increasingly critical, it’s heartening to see companies stepping up to the plate.
Final Thoughts
While the federal minimum wage is still at $7.25/hour, hiring at that rate is going to be tough. With the current hourly worker labor shortage, job seekers have many options—and call the shots.
To make yourself competitive, consider the rates that these companies are offering and try to match (or exceed) to get future employees to notice you—and stay with you for years to come.
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