Target announced that it would offer a $200 bonus to each of its 350,000 frontline employees due to the COVID-19 pandemic. The drive will cost the retail giant more than $70 million.
According to Melissa Kremer, Target’s chief HR officer, the company’s “success this year is a direct result of our team members turning our purpose into action and meeting our guests’ changing needs day after day.”
In July, the Minneapolis-based company gave eligible employees a $200 bonus. That same month, it also increased its minimum wage for US workers to $15 per hour. In April, Target offered incentives ranging from $250 to $1,500 to employees who supervised specific departments in stores.
Target officials revealed that the company is investing “nearly $1 billion more this year in the well-being, health, and safety of team members.”
Meanwhile, some of its Shipt gig workers held a protest outside Target’s headquarters in Minneapolis demanding a new pay model.
The pay model of Shipt is currently using an algorithm instead of a flat rate, according to Business Insider. Shipt categorized Shoppers as independent contractors who are not qualified for employee benefits such as healthcare or minimum wage.
Some Shipt Shoppers claimed that the algorithmic pay model has resulted in lower compensation than is reasonable. Molly Snyder, Shipt’s chief communications officer, said that Shoppers earn $21 per shop which includes base pay, promotional pay, and tips. She also said that while the average did not change during the new pay model, some employees may have seen a drop in pay.
A study conducted by Coworker.org and an MIT Ph.D. student revealed that the new pay model led to a lower wage for 41% of Shoppers, and the number of people barely earning is increasing.
Willy Solis, a Shipt Shopper and a lead organizer of Gig Workers Collective, felt insulted that Target offers incentives at the same time Shipt Shoppers are demonstrating for more reasonable pay.
“We’re grateful and happy for Target employees to be recognized and for receiving that extra pay, but at the end of the day, we as Shipt Shoppers have contributed significantly to make Target a very profitable company,” he said.
Target acquired Shipt in 2017 for $550 million to rival with Walmart and Amazon on same-day delivery.