x Retailers Pay Increases and Anticipated Income - Spectrum Enterprises


Retailers Pay Increases and Anticipated Income

Written by Lainey Nadeau, Spectrum Enterprises

In the last week two retail giants, Walmart and TJX Companies, have announced plans to increase pay for workers in 2015 and 2016. How does this affect the LIHTC program? Anticipated income.


On February 19 Walmart’s CEO Doug McMillon announced via blog a plan to increase pay for employees effective April 2015 with an additional increase to be effective in February 2016. Here are the details of the Walmart increase:

  • CURRENT ASSOCIATES: Pay will increase to at least $9/hour by April 2015 and to at least $10/hour by February 2016
  • NEW ASSOCIATES: Will start at $9/hour and increase to $10/hour after successful completion of a 6-month training program
  • DEPARTMENT MANAGERS: Some department managers will see pay increase to at least $13/hour this summer and  to at least $15/hour in early 2016  
  • SCHEDULING: Employees may have a more fixed schedule, more advanced notice of their schedule and more opportunity to pick up additional shifts. 

With 5,163 Walmart and Sam’s Club locations in the US there is likely one in or near your community. According to CNN this pay increase will impact roughly 500,000 full-time and part-time Walmart associates.


On February 25 TJX, the parent company of TJMaxx, Marshalls, Homegoods and Sierra Trading Post, announced plans to increase pay to at least $9/hour beginning in June 2015. In 2016 all workers will see their pay increase to at least $10/hour, (Bloomberg, Wall Street Journal). TJX Companies have over 3,200 stores worldwide with 191,000 employees.


Regarding anticipated income, the HUD 4350 states, “If information is available on changes expected to occur during the year, use that information to determine the total anticipated income from all known sources during the year,” (p. 5-4). Not including an anticipated raise could result in a finding of non-compliance. The 8823 Guide gives the following example:

Example 1: Specific Source of Income Omitted

Annual Income was not properly calculated. The manager/owner did not include a source of income, such as a raise, overtime, or bonus. When reviewed, a correct calculation indicates that the household was not income eligible at move-in. (page 4-33).

 Where the amount and date of the Walmart and TJX increases are known the increases should be applied to anticipated earnings.

 For current Walmart associates we know their pay will increase to at least $9/hour in April and to at least $10/hour in February 2016. For TJX employees we know their pay will increase to at least $9/hour in June 2015.  Spectrum is advising Property Managers to attempt 3rd party verification to determine if the applicant/tenant will be receiving an increase higher than the $9 & $10/hour. While Walmart & TJX use the Work Number for 3rd party verification we have seen some stores complete the EV. Property Managers may also be able verify over the phone or the applicant/tenant may have written documentation regarding their specific increase. The 8823 Guide states, “Owners should use due diligence by asking follow-up questions when the income certification process reveals unusual circumstances suggesting additional sources of income,” (p. 4-33). If the actual raise cannot be clarified the minimum increase to $9 and $10 should be used. To be conservative this should be applied effective April 1, 2015 & February 1, 2016 for Walmart employees and June 1, 2015 for TJX employees. 

 The date of the second increase at TJX increase has only been announced as “2016.” The statement from Walmart regarding department managers is also vague.  It says only that “some department managers” will see an increase in pay to $13 & $15 per hour and gives “this summer” and “early 2016” as the time frame. Spectrum does not feel that these alone are a known increase. Property Managers should exhibit due diligence by following up in these instances to determine if the applicant/tenant falls into the “some managers” category and if more specific increase dates are known.


Microsoft Word - walmart example

Ann is moving in to a LIHTC unit on 3/1/15. The manager has obtained a Work Number printout to verify her income at Walmart. The file documents attempts to 3rd party verify any additional increase via mail and phone. No additional information was available from Walmart or the applicant. The Work Number printout shows Ann is an associate who currently earns $7.50/hour.  When calculating her income you would use the current rate of pay for 4 weeks (3/1/15 to 4/1/15), the increase to $9/hour for 44 weeks (4/1/15 to 2/1/16) and the increase to $10/hour for the remaining 4 weeks.  The Date to Date Calculation at timeanddate.com is a useful tool.

Your company policy is to use the most recent 6 pay periods when calculating income. The average hours worked in the last 6 pay periods is 37.09 regular hours and 0.84 overtime hours.  You would calculate income in the following way:

 $7.50 x 37.09 x 4 = $1,112.70

$11.25 x 0.84 x 4 = $37.35

 $9 x 37.09 x 44 = $14,687.64

$13.50 x 0.84 x 44 = $498.96

$10 x 37.09 x 4 = $1,483.60
$15 x 0.84 x 4 = $50.40

Total: $17,871.10

 For Year To Date calculations or if gross earnings include shift differentials you may want to apply the % of the increase to the average.

 Average of 6 pay stubs = $287.50

$287.50 x 4 = $1,150
$287.50 x 1.2 = $345 (9/7.5=1.2)
$345 x 44 = $15,180
$345 x 1.11 = 414 (10/9 = 1.11)
$414 x 4 = $1,531.80

Total: $17,861.80

 The slight variation between the 2 calculation methods is based on rounding. I rounded to 2 decimals points for this example.

 Neither Walmart or TJX have addressed if increases will be given to current employees who already earn more than $9/hour.  Again, Property Managers should exhibit due diligence by following up in these instances.

 For new Walmart associates we know their starting pay will be $9/hour. Spectrum is advising Property Managers to apply the increase of $10/hour after 6 months with the assumption that the applicant/tenant will successfully complete the training program.

 The new Walmart scheduling system could be helpful when verifying income. Walmart employees will have access to their schedule for the upcoming 2.5 weeks. This may be especially helpful if someone has recently begun working or if their hours have recently changed. Property Managers will want to follow up with applicants/tenants to determine if they anticipate picking up more shifts as the new scheduling system will allow.

 The new Walmart plan also allows employees to begin contributing to their 401K on their 1st day of employment. Make sure you are verifying this as an asset and questioning if the employees have access to the asset.

 The statement from the Walmart CEO says that the company will continue to give quarterly bonuses to full and part time associates. Please make sure you are questioning bonuses and looking at historical data if available.

 In some states the minimum wage is already at or above the $9 amount. For more information about the minimum wage if your state please visit http://www.dol.gov/whd/minwage/america.htm

Subscribe to Our Blog


 Subscribe in a reader