In a move that sets the bar high for corporate America, Bank of America has announced a significant hike in its minimum hourly pay, which will jump to $23 from the current $22. The North Carolina-based banking giant revealed this week that the $1 increase would take effect from October, applicable to all U.S. employees. This move comes as part of the bank’s commitment to providing a "competitive minimum rate of pay," which it sees as the cornerstone of being a desirable workplace.

The change will propel the annual salary of full-time employees to nearly $48,000, a figure far exceeding the federal minimum wage requirement of $7.25 per hour. This is not the first time Bank of America has raised its minimum hourly rate; since 2017, the bank’s workers have experienced at least five pay bumps. The latest increase means the bank’s minimum wage will have soared 53%, or $8, compared with four years ago. With this commitment to workers’ pay, Bank of America is not only investing in its employees but also leading the way for other companies in sharing success.

Bank of America Increases Minimum Hourly Wage to $23

Bank of America has announced plans to increase its minimum hourly wage to $23. The pay raise will be implemented in October and will be applicable to all U.S. employees of the North Carolina-based banking giant. This new hourly rate marks a $1 increase from the current minimum wage of $22, which was established in May of last year.

A Competitive Minimum Rate of Pay

On an annualized basis, this new hourly rate will result in a minimum salary of approximately $48,000 for full-time employees. In a statement, Sheri Bronstein, Chief Human Resource Officer at Bank of America, underlined the importance of maintaining a competitive minimum rate of pay. She described it as a "foundation" for creating an excellent workplace environment.

Bronstein further emphasizes that investing in benefits to attract and develop talented teammates is a strategy for the long-term success of their employees, customers, and communities. She reiterates the bank’s commitment to reach a minimum hourly wage of $25 by 2025, stating it as a way of sharing success and leading by example for other companies.

A Long Term Strategy

This plan was first announced two years ago, with the goal of reaching $25 per hour for the minimum wage by the middle of the decade. Since 2017, Bank of America employees have seen at least five increases in the company’s minimum hourly rate. Once the new wage is effective, it will represent a 53% increase, or an $8 rise from the 2017 rate.

Bank of America’s new minimum wage is significantly higher than the federal requirement of $7.25 per hour for non-tipped workers. The federal minimum wage has not changed since 2009.

Employee Numbers and Stock Performance

As of the end of June, Bank of America employed approximately 216,000 workers, according to its latest quarterly earnings report. Meanwhile, the bank’s stock has seen a drop of over 13% since the beginning of the year, and it is 15% lower compared to the value 12 months ago.

Takeaways

This decision by Bank of America underscores the importance of competitive wages in attracting and retaining skilled employees. By committing to a substantial minimum wage increase, the bank is setting a benchmark for other companies. Despite stock performance challenges, the bank is investing in its workforce, recognizing the long-term value of employee satisfaction and retention.