Target has scaled its popular Drive Up, Order Pickup service for the holiday season.

Target is raising the bar when it comes to employee benefits. 

Starting July 5, U.S. team members will receive a minimum of $15 an hour, up from $13 an hour. The big-box retailer’s employee efforts — nearly $1 billion more than a year ago — also include a onetime bonus of $200 to its frontline store and distribution center hourly workers as a thank you amid the coronavirus health crisis; free virtual health-care visits for all team members through the end of the year; extended leave for vulnerable employees; free backup child and family care through August; a $1 million donation to the Target Team Member Giving Fund and is now celebrating Juneteenth as an official company holiday. 

“In the best of times, our team brings incredible energy and empathy to our work, and in harder times they bring those qualities plus extraordinary resilience and agility to keep Target on the forefront of meeting the changing needs of our guests and our business year after year,” Brian Cornell, chairman and chief executive officer of Target Corp., said in a statement. “Everything we aspire to do and be as a company builds on the central role our team members play in our strategy, their dedication to our purpose and the connection they create with our guests and communities.”

Target will begin distributing the $200 bonuses at the end of June. The added payments are on top of bonuses (between $250 and $1,500) that were paid out in April to 20,000 hourly store team leads. The company is also waiving its absentee policy for employees with confirmed coronavirus cases or who are symptomatic and is offering all associates access to free mental health counseling sessions. 

“The most important investments we make are in our team,” said Melissa Kremer, Target’s chief human resources officer. “I have tremendous gratitude for the way our team members show up with such purpose and pride for our guests, communities and one another. These investments help ensure that team members can build meaningful careers, take care of themselves and their families and contribute to building our communities through their work inside and outside of Target.”  

Earlier in the week, the Minneapolis-based retailer said Juneteenth would also be recognized as an annual company holiday. The company’s headquarters will be closed each June 19 moving forward. Target’s roughly 1,800 U.S. stores, along with its distribution centers, will remain open. Hourly associates who work will receive time and a half, while eligible team members have the option to take the day off with full pay. Eligibility is based on hours worked, according to a Target representative.

“Juneteenth takes on additional significance in this moment,” Cornell said. So does Minneapolis, the site of not only Target’s headquarters, but the murder of George Floyd, the unarm Black man killed at the hands of a white police officer. Floyd’s death set off racial tensions and protests against police brutality nationwide.

Target declined to comment on its resolution to make Juneteenth a company holiday or its decision to keep stores open on June 19.

Instead, Cornell said in a statement, “We recognized that the racial trauma the country is experiencing now is not new, but throughout recent weeks there has been a sense that this time is, and has to be, different.”

Target has approximately 350,000 employees, most of whom work in stores or distribution centers. The majority of Target’s Black workers are in-store associates, which means they may not have the day off to celebrate Juneteenth. The majority of the corporate employees, who will receive the day off, are white.

Meanwhile, the wage raises come ahead of Target’s 2017 goal to raise the minimum wage to $15 by the end of the year. (Federal minimum wage is $7.25 an hour, but many municipalities have their own minimum wage laws.) The retailer temporarily increased wages by $2 hour in March when the coronavirus began spreading through the U.S. and nonessential businesses were ordered to shut down. At the time, the company said the pay increases would remain in effect until May 2. During the company’s May earnings call, Target extended the $2 boost through June. 

The additional labor costs proved to be expensive. So, too, did the sudden surge in Target’s e-commerce business. Even with stores open during the pandemic, many consumers were afraid to go inside physical stores for fear of contracting the virus. Digital sales surged during the most recent quarter as a result, up 141 percent year-over-year. 

The categories that were most in demand, such as food and beverage and essentials, were also low-margin items, while high-margin categories like apparel fell 20 percent during the quarter.

Other costs became evident as well, such as additional digital merchandising and supply chain fees. Target also added extra cleaning measures to keep stores safe and offered extended same-day delivery services and curbside pickups for the surge in online orders. And the decline in demand for apparel meant extra inventory impairment charges. 

Shares of Target, which closed down 0.79 percent to $118.27 a piece Wednesday, are up 37 percent year-over-year.

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