Amazon is boosting pay and expanding benefits for its U.S. fulfillment center and transportation employees, committing more than $1 billion to its frontline workforce ahead of the company’s peak holiday season.
Amazon said workers with three years of tenure have already seen their pay rise an average of 35%. Under the new increases, average hourly wages will climb above $23, while total compensation — including benefits — will top $30 an hour. Full-time employees will see their annual pay rise of about $1,600, and long-tenured workers will receive hourly raises of between $1.10 and $1.90. Amazon is also enhancing its “step plan,” which provides larger yearly pay bumps for employees who stay with the company.
Beginning in 2026, Amazon will also lower health care costs for employees on its entry-level plan. Weekly premiums will drop to $5, with $5 copays for primary care, mental health and most non-specialist visits. The company said the changes will cut weekly contributions by 34% and reduce copays by 87%, saving employees hundreds of dollars a year.
These updates build on an existing benefits package that includes health coverage starting on the first day for full-time employees, a 401(k) plan with company match, paid parental leave, flexible time off and prepaid tuition at more than 475 education partners through its Career Choice program.
Amazon’s sweeping pay and benefits increases could ripple across the logistics and distribution sector, where labor markets are already tight. Distributors that operate warehouses or run transportation networks will face renewed pressure to raise wages or improve benefits to retain staff. With Amazon setting a higher baseline for compensation, regional distributors and midsize operators could struggle to compete for experienced warehouse associates, drivers and other frontline workers.
The move may force distributors to accelerate pay reviews, invest in automation to reduce dependence on manual labor, or step up retention programs to avoid losing workers to Amazon’s higher-paying jobs — particularly during the critical holiday shipping season.
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