BENTONVILLE, Ark. -- Wal-Mart Stores Inc., the largest private employer in the United States, plans to stop paying staff an additional $1 an hour for working Sundays, taking a bite out of its single biggest expense.
The move, which takes effect next year, applies only to employees hired after Jan. 1, spokesman Greg Rossiter said.
The move won't affect the retailer's 1.4 million current U.S. staff.
Since taking over almost two years ago, Chief Executive Officer Mike Duke has pledged to slow cost growth as the retailer copes with six- straight quarters of sales declines at U.S. stores open at least a year. Operating expenses rose to about $80 billion last year, partly because of health benefits.
"It's sad -- people who work on Sunday need that extra dollar," said Cynthia Murray, a Wal-Mart employee at a supercenter in Laurel, Md. She said she makes $11.20 an hour, and doesn't work Sundays.
The change will take effect at Wal-Mart stores, Sam's Club outlets, and distribution centers.
"We regularly review our compensation programs and we are confident Wal-Mart's pay and benefits are as good, if not better, than other retailers," Mr. Rossiter said.
Wal-Mart's move reflects a change in workplace reality, said Craig Rowley, a vice president of the retail practice at the consulting firm Hay Group in Dallas. According to an annual survey by Hay, only 20 percent of retailers still offer a Sunday premium, he said.
"It's a declining practice," he said.
"When retailers first started opening their stores on Sundays, it was common to have the premium because they were asking employees to do something they never had to do before," he said. "But today, working retail requires that you work weekends -- it's part of the job."
The decision represents a blow to hourly workers, said Dorian Warren, an assistant professor of international and public affairs at Columbia University who studies labor relations.
"It amounts to a huge wage cut," she said. "Wal-Mart has been underperforming financially relative to its competitors and needs to find quick ways to shore up profits."
The retailer also has switched to making incentive payments to hourly employees quarterly instead of annually, and plans to increase the dollar amount in the bonus pool, Mr. Rossiter said.
The company's head count in the United States has stayed stable at about 1.4 million since January, 2008, according to regulatory filings.
Store labor is Wal-Mart's biggest cost, U.S. stores chief Bill Simon said in November. A month before that, Wal-Mart said it plans to end profit-sharing contributions next year, replacing them with matches to employee 401(k) retirement plans to bring down benefits costs.
Some money saved from the switch will go toward bonuses for store employees, the company said.