Wal-Mart to hike pay for 1.2 million workers in 2016

Wal-Mart Stores Inc said more than 1.2 million of its employees would get a raise in 2016 and introduced new rules allowing staff to carry over paid days off as the retailer aims to retain workers amid a tight U.S. labor market.

The steps are part of a previously outlined two-year $2.7 billion investment in wages, benefits and training. The company said the measures are incorporated in financial forecasts unveiled to investors in October.

In a statement, Wal-Mart said all employees hired before Jan 1, 2016 would earn at least $10 an hour, up from the $9 minimum.

Wal-Mart said the raises, which will take effect on Feb. 20, would rank as one of the largest single-day private-sector pay increases ever. Wal-Mart employs 1.4 million workers in the United States and 2.2 million globally.

Wal-Mart has said its investment in wages - the move to increase entry-level pay to $9 an hour was implemented in April of last year - has weighed on its profits but has also led to improved customer service, helping lift U.S. sales recently.

"We're seeing strong increases in both customer experience and associate engagement scores," Judith McKenna, chief operating officer for Wal-Mart's U.S. operations, said in the statement.

The announcement came just a few days after Wal-Mart said it was closing 154 U.S. stores and 115 overseas. The move affected about U.S. 10,000 workers, although Wal-Mart said it was aiming to transfer many to nearby stores.

Wal-Mart said the latest raise would increase the average full-time hourly wage to $13.38 and average part-time wage to $10.58. It did not provide current average figures.

The company said it was also consolidating rules for paid vacation, sick and personal time into one paid time-off category. Among other changes, it said full-time employees would be able to carry over up to 80 hours of paid time off from one year to the next.