UK's GMB Union criticises move by Amazon to scrap bonuses on wage increase

By

Isabelle Crossley

Published
Oct 4, 2018

​Amazon said on Tuesday it will increase hourly pay rates for warehouse workers in the U.S. and UK, but the UK’s GMB Union has voiced it concerns, saying the firm's simultaneous scrapping of bonuses will harm workers.

The GMB Union has accused Amazon of imposing a “stealth tax on its own wage increase”, as quoted by the Guardian.

Previously, Amazon UK employees were awarded one share at the end of every year worth around $1,961 or £1,508, and an additional share once every five years. If employees hold on to shares for two years, they are allowed to sell them tax free. Amazon’s UK wage increases will amount to around £3,120 a year for workers but, as they are losing the share bonus scheme, the actual increase in salary will only be around half of that.

The GBM has also reported that Amazon’s UK staff will no longer be eligible for cash bonuses awarded for meeting productivity and attendance targets over the holiday season.

However, Amazon has denied that such a scheme ever existed. The GMB’s General Secretary Tim Roache criticised Amazon’s tactics, following the announcement.

“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,” the Guardian reported Roach as saying.

Amazon has confirmed that it will phase out its share bonus scheme in both the UK and U.S. but stated that it will be replaced by a scheme that allows employees to buy shares at discounted process over three or five years. The business also stated on a blog post that employees prefer a wage increase to a bonus scheme as it is not performance based and is, therefore, more predictable.

“The significant increase in hourly cash wages more than compensates for the phase out of incentive pay,” Amazon wrote in an email to CNBC.

“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.”