On October 12, 2011, the Institute for Global Labour & Human Rights released a report alleging a number of noncompliances at the Style Avenue factory in El Salvador, including harassment or abuse and forced overtime. Two collegiate licensees registered with FLA – Outerstuff and College Kids – were sourcing from the factory at the time of this report. Outerstuff and College Kids commissioned FLA-accredited monitoring organization, GMIES, to investigate the allegations.
Many countries have adopted plans designed to help their economies recover from the global financial crisis. Unfortunately, those have mostly concentrated on saving banks and companies on the one hand, and on stimulating consumption on the other. Amazingly, there has been relatively little emphasis on the labor market policies needed to save jobs and protect wages. One wonders who is meant to do all the consuming if unemployment keeps rising and wages keep falling (at least in real terms)?
A recent survey by Oxfam Hong Kong showed that more than 81 percent of Hong Kong residents would be “less inclined to patronise a company that violated the rights and interests of its employees.” The survey comes just weeks before the statutory minimum wage goes into effect May 1. According to Oxfam, some companies may cancel paid meal breaks and eliminate rest days to counter the cost of paying the minimum wage.
There are some interesting new postings on the FLA web site related to the FLA’s Syngenta project. As FLA groupies know, that project relates to the FLA’s unique application of its methodologies used in the apparel industry to agriculture. Several years ago the FLA was asked to address the problem of the use of child labor in the Indian seed supply chain. The FLA commissioned two independent studies to assess the risks and then, based on the result of these studies , developed a new approach to internal and external monitoring of labor standards.
It has become very fashionable to criticize Codes of Conduct and monitoring, and to hold them responsible for all sorts of unpleasant realities in workplace conditions – from sub-minimum wages to excessive overtime. At one level, such criticisms fail to recognize that wage and hour issues predate the wave of codes and monitoring that arose in the mid-1990s. In fact, codes were a reaction to such basic labor law violations.
Many companies have internal audit teams that are truly dedicated to making human and labor rights a reality in their global supply chains, often by working with local civil society groups. So why are there still so many factories that do not pay the hourly minimum wage and work 60, 70 or more hours per week? The first reason is that they operate in jurisdictions where there is no culture of compliance. None of their competitors is paying the hourly minimum wage or sticking to the legal limits on working hours, so why should they?
Most corporate social responsibility work on wages has focused on whether a workplace meets a certain level of compensation, usually the legal minimum wage. But fairness of wages and, crucially, perception of wage fairness, are more complex than that. Even if a factory pays workers the national minimum wage and meets other legal requirements (e.g. pay the legally-required wage on time and in full; pay for the proper number of hours worked) it may nevertheless have unfair wages because of undue disparities in wages within the enterprise or because wages may not reflect worker productivity.
On May 27, School House CEO Rachel Weeks visited FLA headquarters in Washington, D.C., to update staff on the development of her business and share lessons she learned while working in Sri Lanka to help ensure women were paid a living wage while producing School House apparel. School House was the first company to visit FLA’s new headquarters location, and staff gathered to hear Weeks’ story.