CVS Health announced on Thursday that it would raise its starting wage for employees to $11 per hour in April.
The drugstore and pharmacy benefit manager credits the raise, which amounts to an extra $2 per hour, according to CNBC, to $1.2 billion in savings from the recent tax cuts. The new base pay would be a significant premium above the federal minimum wage of $7.25 per hour, however, and higher than many of the 29 states that have raised their minimum wage.
In addition to raising the starting hourly wage, CVS said it would also adjust compensation for other retail positions including pharmacy technicians. Additionally, the company said it would implement a new policy that would give full-time employees four weeks of paid parental leave starting in April.
Unlike most European countries, the U.S. does not have federal policy dictating paid parental leave; it’s at the discretion of company policy or state law. Many parents can get 12 weeks of unpaid family leave, due to the Family and Medical Leave Act (FMLA).
Finally, CVS said it would not increase health care premiums during the 2018-2019 year for people enrolled in the company plan.
All the changes are expected to cost the company $425 million.
Along with its new employee benefits, CVS Health also announced that fourth quarter revenue rose 5.3% to $48.4 billion, higher than the $47.5 billion expected by analysts.
“In 2017, we delivered on the four-point plan we set in place to return to more robust levels of growth,” CEO Larry Merlo said in a statement. “Our position in the evolving health care landscape is stronger than ever before, and we remain confident in our model and in our ability to make health care more affordable, more accessible and more effective.”
In 2017, CVS Health announced its intention to purchase the health insurance company Aetna for $69 billion. Fortune has a helpful explainer of who wins and loses in this deal.
