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Fair Compensation

The FLA’s Fair Compensation Strategy

The Fair Labor Association (FLA) and its stakeholders—buyers, suppliers, labor rights organizations, and universities—are part of a global effort to take action to improve workers’ compensation, especially where the purchasing power of workers’ pay is the lowest.

A first step for FLA-affiliated companies came in 2011, when the FLA enhanced the compensation element of its Workplace Code of Conduct, affirming workers’ right to wages that meet their “basic needs and provide some discretionary income.” Then, in 2015, the FLA Board of Directors unanimously approved the implementation of the FLA Fair Compensation Work Plan (available in “About This Work” below), as the organization’s formal strategy for helping stakeholders define and enact this commitment.
 
The strategy recognizes that increasing worker compensation—where the data indicates that compensation is low—is complex, and cannot be solved as easily or immediately as other compliance issues, such as locked emergency exits, or a broken fire extinguisher. Nonetheless, the need to provide fair compensation for workers is urgent. Low pay is at the root of chronic social compliance issues, such as excessive hours of work. And as the ILO has reported, the situation has been getting worse, with labor’s share of income in developing countries declining steadily over last twenty years.
 
The FLA Fair Compensation strategy charts a path forward on one of the biggest social responsibility challenges of our time. It was devised through a multi-stakeholder process, with important input from buyers, suppliers, labor rights organizations, universities, and others. Ongoing reporting on the strategy’s progress, tools for stakeholders, and other news and information are available at the links below.

ABOUT THIS WORK

 An explanation of the FLA’s Fair Compensation Strategy and Q&A on our goals and methods.

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NEWS & ACTION

 Compensation news from around the world, plus FLA and stakeholder action on fair wages.

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REPORTS

 Original FLA reporting on compensation levels in global supply chains, compensation risk analysis, and more.

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TOOLS

 Tools and guidance for fair compensation data collection.

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Latest Updates

Fair Compensation for Farmworkers: Emerging Good Practices and Challenges

Publication date: 
Monday, February 27, 2017
Report type: 
Fair CompensationReports
The World Bank reports that among the 2.1 billion people worldwide estimated to be living in poverty, "a vast majority ... live in rural areas ... mostly employed in the agriculture sector." To catalyze progress on fair compensation for farmers and workers involved in agricultural supply chains, FLA assessors began collecting information from workers in 2015 on wages earned at the farm-level in seven countries where the FLA conducts agricultural monitoring.

FLA and FWF support workers' rights and inclusive wage-setting in Bangladesh

Publication date: 
Friday, January 13, 2017
Report type: 
Fair CompensationNews and Action
On, January 13, 2017, the Fair Labor Association (FLA) and Fair Wear Foundation (FWF) sent a letter to the prime minister of Bangladesh, expressing concern over government and employer reaction to recent garment worker protests in the Ashulia area of Dhaka, including the arrest or firing of protesting workers and the detention of union leaders and workers’ rights advocates.

Toward Fair Compensation in Global Supply Chains: Factory Pay Assessments in 21 Countries

Publication date: 
Wednesday, August 3, 2016
Report type: 
Fair CompensationReports
The FLA and its stakeholders (buyers, suppliers, labor rights advocates, and universities) are part of an effort to improve compensation for workers in global supply chains. As a contribution to this effort, the FLA presents here a first-of-its-kind report detailing worker compensation data collected in 2015 by the FLA in 124 mainly apparel and footwear factories in 21 countries.

Monetary Penalties Used as Discipline in Vietnam

Publication date: 
Tuesday, June 28, 2016
Report type: 
Fair CompensationNews and Action
During the 2015 factory assessment cycle in Vietnam, FLA assessors identified a number of instances of monetary penalties used as discipline. Because of how these deductions were designed and implemented, they may not appear to brands to violate the FLA Workplace Code of Conduct as obviously as a direct salary deduction would. However, any disciplinary penalty that reduces a worker’s pay constitutes a violation of the FLA Code (benchmark 2, “Monetary Fines and Penalties” under “Harassment or Abuse”).

Unpaid overtime violation common in Egypt's free trade zones

Publication date: 
Wednesday, May 4, 2016
Report type: 
Fair CompensationNews and Action
Factory assessors have found that local authorities often will not enforce the overtime regulations in the free trade zones, and consequently factories will often ignore them, planning their production for a 48-hour workweek, though a regular workweek in the free trade zones is limited to 42 hours. Any hours worked over the 42-hour limit must be paid at the local legal overtime premium rate of 135 percent for daytime work and 170 percent for nighttime work.

FLA Releases New Compensation Data Collection Tools and Guidance Materials

Publication date: 
Thursday, March 3, 2016
Report type: 
Fair CompensationTools
The collecting and organizing of data on compensation paid to workers in global supply chains is vital due diligence work. To help FLA-affiliated companies begin to retrieve and analyze compensation data from their own supply chains, the FLA has released a new data-collection tool, and an accompanying guidance document.

Beyond Minimum Wages in Corporate Codes of Conduct

Publication date: 
Friday, October 2, 2015
Report type: 
Fair CompensationNews and Action
At the beginning of September, FLA Vice President of Programs Jason Judd participated in the "Squaring Higher Wages and Competitiveness" conference in Ankara, co-hosted by the Just Jobs Network and the International Monetary Fund (IMF). In preparation for this conference, the FLA prepared a chapter of material describing its latest work on fair compensation, which was distributed to all conference participants, as part of the publication "Global Wage Debates: Politics or Economics?".

Oxfam Report Cites FLA Fair Compensation Effort in Myanmar

Publication date: 
Thursday, October 1, 2015
Report type: 
Fair CompensationNews and Action
A new Oxfam International report summarizing living wage progress in five countries cites the FLA's leadership -- along with the Ethical Trading Initiative -- to organize US and European brands to express strong support for meaningful and inclusive minimum wage negotiations in Myanmar, in pursuit of fair compensation for garment workers.

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