Wages & Benefits

Wages and Benefits

An important area of focus for us has been working with our suppliers to help ensure they provide appropriate wages to the people who make our products. This means they are paid what they are owed for their work, and earn enough to meet their basic needs as well as provide some discretionary income. Further, as a member of Ethical Trading Initiative (ETI), our efforts to improve working conditions and labor standards in our supply chain are informed by ETI’s Base Code, which posits:

  • 5.1 Wages and benefits paid for a standard working week meet, at a minimum, national legal standards or industry benchmark standards, whichever is higher. In any event wages should always be enough to meet basic needs and to provide some discretionary income.
  • 5.2 All workers shall be provided with written and understandable Information about their employment conditions in respect to wages before they enter employment and about the particulars of their wages for the pay period concerned each time that they are paid.
  • 5.3 Deductions from wages as a disciplinary measure shall not be permitted nor shall any deductions from wages not provided for by national law be permitted without the expressed permission of the worker concerned. All disciplinary measures should be recorded.

In addition to our efforts to align our approach with ETI’s Base Code, our Code of Vendor Conduct is aligned with ILO Conventions C131 and C95, and the United Nations Universal Declaration of Human Rights (UN UDHR), Articles 23 and 24.

Factories may fail to fulfill these obligations in a variety of ways, such as not paying sufficient overtime premiums or making illegal deductions from workers’ pay. In some cases, underpayments can be hard to detect or go unnoticed by workers, as pay calculations can be complex or may not be clearly communicated.

We require suppliers to pay at least the legal minimum or industry wage, whichever is higher. When violations are found (either by our internal team of Supplier Sustainability specialists, or by ILO Better Work), the facility must remedy the situation. If wage violations are found and the supplier fails to properly remediate, we will implement consequences up to and including termination of our relationship with that supplier.

To monitor that workers receive the full wages and benefits they have earned, our Supplier Sustainability team reviews factory records, interviews management and workers, and provides training on policies and practices. This includes assessing such factors as production quotas and piece rates, wage calculations and statements, contract terms, and leave and holidays.

We have also conducted wage studies in our supply chain multiple times in order to assess wages paid against various local and international frameworks. In data collected from a selection of our suppliers, we found wages met legal minimum wage requirements and in many cases exceeded local norms. To help confirm the accuracy of this baseline study, we engaged an independent third party to verify the process and findings.

We recognize that addressing this important issue is a shared responsibility, and that our purchasing practices can have an impact on wages of workers in our supply chain. To help us better understand how our business practices can affect workers’ ability to earn a wage that is aligned with the above codes and principles, we have requested all of our tier 1 suppliers to participate in the Better Buying purchasing practices survey. Our hope is that the results of this survey, which we anticipate will be shared with us in 2019, will provide us with actionable insights and recommendations that can be implemented in how we partner with our suppliers. This work is particularly important as we continue to consolidate our supply base, and forge deeper relationships with fewer suppliers globally.

Another foundational aspect of our approach to wages is related to freedom of association, and more information on our approach to helping ensure workers’ associative rights are respected is available here. Our COVC explicitly supports freedom of association and the rights of workers to lawfully and peacefully associate, organize and bargain collectively. These rights can help workers find a common voice and provide them with a framework for engaging with management on fair wages, sufficient benefits and the right to do their work in fair and decent conditions. We monitor to see these rights upheld through our Assessment & Remediation program, as well as through hosting country-level workshops on freedom of association for both worker representatives and factory managers.

We also collaborate on advocacy work to push for appropriate wage-setting mechanisms in certain countries. In recent years, we have engaged both the Bangladeshi and Cambodian governments on their minimum wage review processes. We believe that annual and consultative wage review mechanisms are an important legislative protocol, as they will help ensure that minimum wage levels are updated on a regular basis to account for inflation and cost of living adjustments.

Further, we will continue to look for ways to improve our approach through consultations with relevant stakeholders and expert organizations, and welcome feedback, such as ones that we have received from the Corporate Human Rights Benchmark, and the Platform Living Wage Financials, both of which assess our performance on this issue on a regular basis.