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.
Understanding workers’ perception of the factories they work in is essential for management seeking to recruit and retain talented and qualified employees. The Fair Labor Association’s SCOPE Workers’ Surveys are standardized, quantitative questionnaires which are completed anonymously by a randomly-selected, representative sample of workers. SCOPE surveys measure the effectiveness and impact of factories’ social compliance efforts in areas such as hours of work; hiring; communication; and grievance and complaint systems.
Issues: During a 2008 FLA external assessment of a garment factory supplying the SanMar Corporation, FLA assessors found that the factory’s attendance and payroll records were “undependable and unreliable.” There was no way to verify the wages of the factory's 139 workers, resulting in uncertainties such as whether payment was made for all hours worked (production records showed hours worked in factory that were not on payroll records) and whether employees were paid correct wages (for both regular hours and overtime).
Issues: A 2009 FLA assessment uncovered that some of the more than 400 workers at a factory supplying DVDs and CDs for Electronic Arts, Inc. were not using earplugs and eye protection in work areas where they were mandatory. In addition, deductions from pay for workers’ savings plans exceeded the legal 30 percent limit.