"We will cover domestic partners in the medical, dental, vision, life, critical illness and accident plans," reads the memo about the retailer's 2014 benefits package. "This means Walmart will offer these benefits to an associate's same- or opposite-sex spouse or unmarried partner."
The news is likely to cheer Walmart's various critics on the left. But the memo makes clear that the change doesn't come from any particular commitment to gay rights.
"It's a business decision, not a moral or political decision," it reads. "We operate in 50 states, hundreds of municipalities and Puerto Rico, and as clarified under the Supreme Court's decision to strike down section 3 of the Defense of Marriage Act (DOMA), each of these states are developing different definitions of marriage, domestic partner, civil union, etc.
By developing a single definition for all Walmart associates in the U.S. and Puerto Rico, we are able to ensure consistency for associates across our markets."
That makes sense: In the face of a growing hodgepodge of local laws dictating who does and doesn't receive benefits for their domestic partners, and with Affordable Care Act provisions soon to mandate health insurance coverage for full-time employees, an across-the-board policy that encompasses the broadest legal standard is the simplest way for a large national firm to go.
Of course, the new policy still only applies to the partners of those Walmart employees who actually get full benefits. As Reuters explains, only around half of Walmart employees are currently covered by its health plans, and the retailer's part-time workers need to work there at least a year and average 30 hours a week to qualify.
Still, this is a big win for the domestic partners and same-sex spouses of Walmart's eligible employees. And as the company notes in its memo, it will help the retailer stay competitive when it comes to attracting employees.
"Given the diverse world we live in today, a comprehensive benefit package that includes domestic partner benefits appeals to the contemporary workforce," the memo reads.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
Walmart's Cheap Labor: Bad for Business, Bad for Shoppers
Walmart to Offer Benefits to Same-Sex Partners, Leaked Memo Reveals
Last week, Walmart agreed to pay an $81.6 million settlement after pleading guilty to violating the Clean Water Act and other environmental laws in California and Missouri. It's not the first time Walmart has had to pay up for environmental violations, either. In 2012 the company paid a $27.6 million settlement to settle similar charges from California authorities.
Federal prosecutors claimed that poorly trained workers disposed of fertilizer, pesticides, and other toxic materials by dumping them into trash bins or pouring them into drains connected with the sewer system.
In other words, Walmart's reliance on employees lacking key training cost it nearly $110 million for these violations alone.
Granted, Walmart has updated its training programs to teach employees how to dispose of toxic materials. However, here are some reasons to believe this scandal is a symptom of a larger problem.
Consider the Huffington Post's analysis of an internal Walmart document leaked last year. A low-level worker at Sam's Club (a division of Walmart) who starts out making around $8 per can expect to make about $10.60 per hour after working at the company for six years if he is a "solid performer" and gets one promotion (the average rate). With wages like those, it's no surprise that the company's annual turnover rate was more than 37 percent in 2011.
Because it's not paying employees enough to stick around, Walmart has an incentive to invest as little as possible into training each employee, lest their investment simply give their employees the skills to obtain higher-paying work elsewhere.
Under its current labor model, the company certainly has reason to train its employees well enough to avoid a scandal -- but just well enough -- and sometimes skating along that edge turns out to be costly, as is the case when employees don't know how to properly deal with toxic waste.
According to Bloomberg, this workforce reduction has driven customers away due to the company's inability to keep its shelves stocked and keep checkout lines moving.
Clearly, these are known issues. Even a single out-of-stock item can significantly affect sales. Walmart went so far as to hire an outside firm -- Acosta -- to secretly audit the availability of certain items in its stores. Bloomberg quotes a 2012 study in which Erick Kritsky, Acosta's director of application development, said, "In a superstore, if we fix a void at the beginning of the month, one single SKU in oral care translates to about $360,000 in sales at the end of the month."
The high cost of cheap labor isn't just monetary. Cheap labor also brings risks of worker safety scandals, such as the recent building collapse in Bangladesh that killed more than 1,100 workers and a factory fire last year that killed 112 people. Both factory buildings contained evidence that the companies were doing business with Walmart.
While retailers like Walmart may be drawn to Bangladeshi factories because they are low-cost options, these discounts come at a cost to worker safety when factory owners fail to invest in safe working conditions to ensure they can offer the lowest possible prices.
In addition to creating bad PR, safety scandals can cause worker unrest and disrupt a business' supply chain. For example, after the building collapse, violent protests erupted in Bangladesh, in which workers set fire to at least two factories.
Some retailers show that low-cost labor is not the only alternative. For example, Trader Joe's has a rule that the minimum pay for all full-time workers must be at or above the median household income in their community. Also, Slate has reported that after less than five years at Costco (COST), employees will make about $19.50 per hour and receive a $2,000 bonus twice a year.
And the cost of such "generosity"? Forbes points out that Costco's most recent quarterly report showed 8 percent sales growth from last year, while Walmart offered only 1.2 percent sales growth.
Granted, Costco's relatively smaller size gives it better growth potential than the Bentonville Behemoth. However, its ability to operate on a higher-wage model suggests that cutting workers' pay to the bone isn't the only way to go.
It's a point investors should note as they look at mass-market retailers: There are investment opportunities that lack the risks associated with Walmart's cheap labor model.