Amazon to offer free Prime benefits to U.S. hourly warehouse workers starting next year
Hourly workers at Amazon who fulfill orders for millions of Prime members have always needed to pay if they wanted to be Prime members themselves, but that will change starting early next year.
The e-commerce giant announced an updated pay and benefits package for hourly employees in its fulfillment and transportation network Thursday morning. The changes include a $1.50/hour increase in average base pay, to more than $22/hour, and the addition of Prime to the benefits package for these U.S. hourly workers.
Simmering in the background is the union movement. While the Amazon Labor Union achieved a historic victory at a Staten Island warehouse in New York in 2022, other attempts have faced challenges. The International Brotherhood of Teamsters has been getting increasingly involved in efforts to organize Amazon workers.
In pure financial terms, Prime membership is far from the biggest line item in a compensation package that also includes health care benefits from the first day of employment, and a 401(k) program with a company match. Prime currently goes for $139 a year, including free delivery, Amazon Music, Prime Video, and other benefits.
But beyond that, it’s a symbolic move that further aligns the interests of Amazon’s workers with those of its customers, effectively ensuring that everybody is a member of the same club.
“Our front-line team members across our operations are a big part in bringing the magic of Prime to customers, and starting early next year, Prime will become part of their benefits package,” said Udit Madan, VP of Amazon Worldwide Operations, in a post announcing the changes. “Hourly team members in the U.S. will get Prime at no additional cost for as long as they are a part of the Amazon team.”
Amazon is not the first big retailer to go this route. Costco, for example, has long offered free executive memberships to employees, also allowing them to offer memberships to up to three family members and friends.
A few caveats: Delivery drivers who work for independent Amazon Delivery Service Partner (DSP) companies are not eligible for the Prime perk. Amazon is also not yet making Prime benefits available its salaried corporate and tech employees, or to Zoox, Whole Foods, One Medical, or Zappos employees.
However, now that Amazon has gone down this path, it wouldn’t be a surprise to see the company extend Prime benefits to more employees in the future.
Amazon says it has about 800,000 hourly workers in its U.S. fulfillment and delivery network, but the exact number who will receive Prime benefits isn’t yet clear.
The fine print from the company: The perk will kick in after 90 days of employment. Prime benefits will be offered to all U.S. full-time, part-time, and reduced-time hourly employees in Tiers 1-3, which ranges from entry-level positions (T-1) to supervisory roles (T-3); as well as Level 4 (L4) hourly managerial roles.
Such a move has been recommended for years by author and logistics industry veteran Gisela Hausmann, who worked at an Amazon delivery hub in South Carolina and wrote a business memoir, “Winning @ Amazon.”
In an interview with GeekWire in 2021, Hausmann described free Prime memberships as one of the moves Amazon could make in its quest to become “Earth’s Best Employer, generating goodwill among the workforce, and making workers more likely to advocate for Amazon in their communities as goodwill ambassadors for the company.
“Standing on a scissor lift, Jeff Bezos could have held a great speech which he could have concluded by announcing that every warehouse worker would receive an additional Christmas bonus — a free Prime membership, for as long as they worked at Amazon,” Hausmann wrote in her book, referencing the Amazon founder.
It would have been an epic scene, but Amazon doesn’t have quite the flair for the dramatic, opting instead for three sentences in the sixth paragraph of a blog post.