Wages & Benefits
Wages and Benefits
An important area of focus for us has been ensuring that the people who make our products are paid what they are owed for their work. Factories may fail to fulfill this obligation for a variety of reasons, 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 are complicated or may not be clearly communicated.
We require suppliers to pay the legal minimum or industry wage, whichever is higher. When violations are found, 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 ensure workers receive the full wages and benefits they have earned, our field 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 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 minimum wage requirements and in many cases exceeded local norms. To ensure the accuracy of this baseline study, we engaged an independent third party to verify the process and findings.
We also collaborate on advocacy work to push for appropriate wage-setting mechanisms in certain countries. Most recently, in response to the unrest in December 2016 in Bangladesh, we sent a letter to the prime minister of Bangladesh, seeking to encourage the government to institute a regular wage review mechanism. We believe that annual wage review mechanisms are an important legislative protocol, as they will help ensure that minimum wage levels are adjusted on a regular basis to account for inflation and cost of living adjustments.