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2016 Summaries of Factory Assessment Findings

Publication date: 
Tuesday, November 28, 2017

In 2016, the FLA conducted a total of 149 assessments of facilities owned or contracted by Participating Companies, Participating Suppliers, and Category B collegiate licensees.  FLA assessors conducted these site visits in facilities employing more than 175,000 workers in 27 countries, including factory visits in Myanmar, Poland, and the Republic of Georgia for the first time.  FLA staff chose these factories for assessment from a total of 4,750 facilities within the scope of the FLA program, which together employ more than 4.65 million people.

The FLA conducts two forms of Sustainable Compliance Initiative (SCI) assessment. In 2016, FLA field staff conducted 136 “foundational” assessments at contract facilities used by FLA-affiliated brands, with 13 “baseline” assessments (a more in-depth evaluation) conducted at facilities owned and operated by FLA-affiliated brands and suppliers.  Foundational assessments include FLA recommendations on how to remediate each finding requiring immediate action; baseline assessments include a root-cause analysis and FLA recommendations for each and every finding.

With both forms of evaluation, FLA assessors measure a factory’s success at fulfilling each of the nine elements of the FLA Workplace Code of Conduct.  To elaborate on the specific requirements for each code element, and to guide assessors’ reporting on working conditions in each facility, the FLA has developed a comprehensive list of 162 benchmarks, delving deeper into the conditions an employer must fulfill to succeed in implementing each of the nine broad labor standards.  The chart on page X shows the top three benchmarks for each code element that FLA assessments indicate most often require improvement.  This chart also indicates the frequency with which FLA assessors report non-compliance with each of the top benchmarks. 

Low Incidence of Child and Forced Labor Findings
Consistent with FLA reporting from recent years, the chart illustrates the relative success most assessed factories have achieved in fully implementing FLA standards on child labor and forced labor.   For example, FLA assessors found no underage workers during their site visits, and reported that around 85 percent of all facilities violated no child- or forced-labor benchmarks whatsoever.  

In facilities with a violation of the forced-labor code element, the most common benchmarks triggered – in a total of 18 facilities – involved interference with workers’ freedom of movement, due to physical barriers like locked doors, or practical barriers like the holding of legal documents by factory management, or the imposition of fees or deposits that hold workers in debt to an employer or recruiter.  Under the child labor code element, a total of 13 facilities fell short of full compliance with legal protections for young workers (those of legal working age, but younger than 18), or for workers participating in apprentice or vocational education programs.

Emergency Preparedness, Hours of Work, and Minimum Wages
Also consistent with recent FLA reporting, for the third year in a row the need to improve evacuation preparedness appears among the top-five areas requiring factory attention, as found in 87 percent of all assessments in 2016.  To assess for full compliance with this benchmark, FLA assessors check for posting of evacuation plans, maintenance of alarm and emergency lighting systems, worker training on evacuation procedures, and other indicators.  Of the 19 facilities assessed as fully prepared for emergency evacuation, eight were US facilities operated or contracted by Category B licensees.  Four facilities in China, two in Mexico, and one each in Bangladesh, Cambodia, Taiwan, and Thailand also achieved full compliance with the emergency preparedness benchmark.

Also in 2016, FLA assessors found more than three-quarters of all facilities in need of improvement regarding excessive hours of work.  To be in full compliance with the FLA Workplace Code of Conduct, facilities must base their production planning on a regular workweek, and total hours per employee must not exceed 60 per week, or legal limits, whichever is lower, with special hours-of-work considerations for young, elderly, or pregnant workers, where required by law.  In addition, the FLA code requires all overtime work to be voluntary, although in half of all facilities visited in 2016, assessors found that overtime work was mandatory.  More than a third of all facilities also failed to provide one rest day in every seven to their workers, or to provide annual leave in accordance with local law.  

While the FLA has been finding minimum wage violations declining in recent years, data for 2016 show an uptick over 2015, with 13 percent of facilities worldwide falling short of full compliance.  In some cases, these violations arise from factories outsourcing work (security, maintenance, food service) to outside vendors not paying the minimum wage, as assessors found in Malaysia, Sri Lanka, and China.  In other cases, assessors found facilities following outdated minimum wage rates, failing to make up the difference to piece-rate workers whose earnings fall below the minimum wage, or unable to provide records to confirm that minimum wages were paid.  Facilities in Myanmar and Vietnam were found to pay regular workers at least the minimum wage, but to pay a lower rate to temporary workers. 

Employment Relationship:  Assessing Policies and Procedures
To better help brands and suppliers address workplace issues like those identified above, FLA assessors also provide a comprehensive review of factory policies and procedures, against the 32 benchmarks related to the “Employment Relationship” code element.  Success with these benchmarks indicates that a factory has strong management systems and communications functions in place that can help ensure that individual instances of non-compliance with other code elements and benchmarks do not recur.  For example, FLA assessors check that factories maintain proper proof-of-age documentation to safeguard against child labor.  Likewise, factories are evaluated on whether they maintain a comprehensive system for tracking and recording hours of work, to control excessive overtime.  Factories must also provide regular training for workers on legal wages and factory compensation procedures, so that greater worker awareness might prove a check on future pay errors.

Complete reports on all FLA factory assessments, including improvement plans submitted by brands or suppliers, are available on the FLA website, here.  The FLA will add brief summaries of significant findings by country to this page, as such material becomes available.