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Supply Chain Innovation

Compensation

Addressing the complex issue of worker severance

Wednesday, February 27, 2013

Workers are the ones most exposed and vulnerable when market conditions push companies and suppliers to reduce employment, of either a portion or the entire workforce. Many countries legally mandate payment of severance - typically calculated based on job tenure - when partial or full retrenchments arise, but there is generally no requirement in domestic law to create a fund to ensure that the factory is able to meet its severance liabilities.

FLA Board Places Participating Supplier Hey Tekstil on Special Review

Tuesday, July 24, 2012

On July 24, 2012, the Fair Labor Association Board of Directors adopted a resolution to place Participating Supplier Hey Tekstil Sanayi ve Ticaret A.S. (“Hey Tekstil”) on Special Review.

As outlined in the FLA Charter, an affiliated company may be placed on Special Review if it fails to achieve or maintain compliance with FLA labor standards, and a company’s affiliation status may be terminated if the company does not address the issues prompting Special Review status.

Ensuring Proper Benefits for Workers in India

Issues: A 2009 follow-up visit by FLA assessor revealed that a factory producing sports shoes for Nike in India had set an annual limit for bonus qualification at Rs. 3,500. This was well below the legal amount of Rs. 10,000. The factory employed 1,563 people.

Solutions: FLA assessors verified that the bonus qualification was raised to Rs. 10,000 (approximately $200), and a notice was posted to inform workers of the change.

Associated organization: 

Discussing Fair Wages in China

Thursday, February 2, 2012

Representatives of major brands, the Chinese Government, and the Fair Labor Association (FLA) gathered in Beijing on January 8 to discuss a new book examining wage trends at the global level. The book, Fair Wages – Strengthening Corporate Social Responsibility, sheds light on wage inequalities and unfairness facing workers around the world. It was authored by Dr. Daniel Vaughan-Whitehead, professor of corporate social responsibility at Sciences Po in Paris, who is responsible for wage practices at the International Labour Organization (ILO).

Back-Pay for Owed Overtime Wages in El Salvador

Issues: During a 2004 factory visit, FLA assessors learned that a facility producing t-shirts and performance apparel for VF Corporation was not accurately compensating all workers for overtime work. Workers were paid $0.63 per hour and, according to law, regular overtime (not on a rest day or weekend) should be paid double ($1.26 per hour). When asked, factory management said they were not aware of the law. The factory employed 1,329 people.

China Answers Global Crisis with New Labor Market Policies

Wednesday, May 20, 2009

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)?

Investigation Report Published on Labor Rights Allegations at Style Avenue Factory

Wednesday, December 14, 2011

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.

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