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Discrepancies in Calculation of Minimum Wages in Bangladesh Export Processing Zones

Publication date: 
Thursday, September 24, 2015

An affiliate of the FLA sourcing from Bangladesh has alerted the organization to a discrepancy between how two different -- but similarly named -- organizations in Bangladesh are explaining how to calculate minimum wages in Bangladesh's Export Processing Zones (EPZs).  The Bangladesh Export Processing Zone Authority (BEPZA) is a government organization, and is the controlling authority in calculating minimum wages.  The Bangladesh Export Processing Zone Investment Authority (BEPZIA) is an investors' association, and it has no legal jurisdiction to provide different wage calculations from the government authority, according to the local accredited service providers consulted by the FLA.

Each organization released its circulars in March of this year (they are linked as PDFs below), and the following chart summarizes the discrepancies between the two methods of calculation, showing that the BEPZIA formulation is unfavorable to workers.  Any errors in payment resulting from following the wrong guidance (i.e. BEPZIA's) can have a multiplying effect, as these base wages are used to calculate overtime wages.  


 

The FLA Workplace Code of Conduct and governing benchmarks require employers to comply with all national laws on compensation, which, in this case, requires following the calculations established by BEPZA, rather than BEPZIA.  Therefore, the FLA urges all affiliated brands sourcing from EPZs in Bangladesh to take the following immediate steps:

1)  Check the current calculation of wages at your suppliers to ensure that they follow BEPZA requirements, and
2)  If violations are found, insist that employers follow the correct government calculations immediately, and provide retroactive payments for any outstanding unpaid amounts.

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