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Supply Chain Innovation

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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