Amazon has announced a $1 billion investment aimed at improving compensation and reducing health care costs for its U.S.-based fulfillment and transportation employees.
The initiative, unveiled on September 17, 2025, is part of the company’s broader effort to enhance worker benefits and retain talent ahead of peak shopping seasons such as Prime Day and the holidays.
The Seattle-based e-commerce giant confirmed that the average hourly wage for these roles will rise to over $23, with total compensation—including benefits—exceeding $30 per hour.
Full-time employees are expected to see an average annual pay increase of $1,600, while tenured staff will receive hourly raises ranging from $1.10 to $1.90.
Amazon Health Care Costs Slashed for Entry-Level Plans
Starting in 2026, Amazon will reduce the cost of its basic health care plan to $5 per week, with co-pays also set at $5.
This change represents a 34% reduction in weekly contributions and an 87% drop in co-pays for primary care, mental health, and most non-specialist visits.
The company estimates that these adjustments will save employees several hundred dollars annually.
The move is based on employee feedback and aims to make health care more accessible and affordable for frontline workers.
Amazon has stated that it will continue to refine its benefits offerings in response to workforce input.
Pay Progression and Retention Strategy
Amazon’s compensation structure includes a yearly step plan that increases pay based on tenure.
According to the company, employees who have remained with Amazon for three years have seen their pay rise by an average of 35%.
The latest investment will enhance this progression model, making annual increases more substantial than in previous years.
Udit Madan, Senior Vice President of Amazon Worldwide Operations, emphasized the company’s commitment to creating opportunities for growth.
“These investments are part of our ongoing commitment to making Amazon a place where people can thrive,” he said.
Labor Relations and Industry Trends
The announcement follows a period of heightened labor activity.
In December 2024, workers at seven Amazon facilities staged strikes, demanding better working conditions and a formal labor agreement.
That same month, Amazon reached a settlement with the Occupational Safety and Health Administration (OSHA), agreeing to implement ergonomic improvements across its U.S. facilities to address musculoskeletal injuries.
The wage and benefits enhancements also align with broader industry trends.
Walmart, the largest private employer in the U.S., raised its average hourly wage to over $18 in early 2024, while Target’s starting pay ranges from $15 to $24 depending on location.
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