Photographer: Kiyoshi Ota/Bloomberg
McDonald's to Boost Its Tuition Benefits After Tax WindfallBy
Fast-food chain to spend $150 million on education program
Restaurant companies are adding perks in tight labor market
McDonald’s Corp. plans to pump $150 million into tuition assistance for its U.S. employees, becoming the latest corporate giant to use the federal tax overhaul to boost benefits.
The money will help make 400,000 restaurant workers eligible for the program, the fast-food chain said on Thursday. To qualify, workers will only need to be with the company for 90 days, down from nine months, and work 15 hours a week, down from 20. The infusion, paid over five years, triples the current spending level.
The move bolsters McDonald’s Archways to Opportunity program, an effort started in 2015 to help workers earn a high school diploma, pay for college tuition or learn English. Restaurant chains are under pressure to sweeten their benefits as they cope with a tighter labor market. Starbucks Corp. said in January that it was spending $250 million on new worker perks, including higher pay and paid sick time.
In February, the U.S. unemployment rate held at 4.1 percent -- the lowest its been since 2000. Restaurant chain Noodles & Co. also recently bettered benefits for employees, adding six weeks of paid maternity leave and $1,000 a year in student-loan assistance for managers.
“The fight for talent continues,” McDonald’s Chief Executive Officer Steve Easterbrook said earlier this year. “It’s going to get increasingly challenging to attract the talent you want into your business, and then you’ve got to work really hard through training and development to retain them.”
McDonald’s crew members will now be able to get up to $2,500 a year in tuition help, up from $700. Managers will get as much as $3,000 a year, compared with $1,050 previously.
The Oak Brook, Illinois-based company cited U.S. tax changes, which lowered corporate rates to 21 percent from 35 percent.