New Report Paperwork Elevated Employee Wages in Factories in China and Vietnam

A new FLA report shows how its affiliates have raised wages for factory workers in China and Vietnam.

Fair Labor Association presents examples of practical approaches that secure living wages for workers

Too often factory workers have to work excessive overtime to supplement low wages in order to make ends meet, but that is not fair to workers. “

– Sharon Waxman, FLA President and CEO

WASHINGTON, DC, UNITED STATES, Aug. 31, 2021 / – The Fair Labor Association (FLA) reports significant increases in net wages – from 29 percent to 57 percent over a three-year period. released today. The increases enabled factory workers in China and Vietnam to earn a living wage without working overtime.

Factory workers in the supply chains of three FLA members earned higher wages during the regular work week as factories reduced excessive overtime – a persistent problem in clothing factories around the world and a common breach of the FLA standard for working hours.

“Too often factory workers have to work excessive overtime to supplement low wages in order to make ends meet, but that’s not fair to workers,” said Sharon Waxman, president and CEO of the FLA. “A better quality of life for factory workers can be achieved when buyers, suppliers and workers work together to earn a living wage in a regular working week.”

Overtime that exceeds 60 hours per week or leaves workers without a day of rest per week are common in global supply chains. Factory workers typically look for overtime when they cannot afford the basic expenses to support their families because they don’t earn enough during a regular working week. Low pay stems from the pressure to produce products quickly and at low cost based on the expectations of buyers, retailers, and consumers.

The new FLA report, Reaching Living Wage for Garment Workers, presents practical approaches to achieving a living wage through better purchasing practices by buyers and better planning by factory management. Case studies in the report identify the root causes of excessive overtime and describe how buyers, suppliers and workers have worked together to improve wages and reduce overtime.

Changes at the factory level included engaging the workforce to ensure employee feedback was taken into account when the factories rolled out new systems. The new approaches replaced outdated and inadequate piece-rate wage systems that enabled workers to earn higher base wages and diversified bonuses that rewarded quality and efficiency. The changes resulted in reduced overtime and wage increases during the regular work week that exceeded current estimates by the Global Living Wage Coalition.

In China, for example, New Era and its contract factory in Jiangsu began to talk more regularly about production capacity and upcoming orders. The factory introduced a higher base wage (instead of an hourly wage) and invested in new machinery to simplify production. In two years, net monthly wages for workers rose 57 percent.

In Vietnam, Maxport Limited’s Nam Dinh manufacturing facility changed its production schedule to adopt a shorter work week to accommodate unexpected delays and to set stricter purchasing guidelines for their customers. Over a five-year period, the average increase in real wages was 39 percent.

The report is part of the FLA Fair Compensation Strategy, which outlines a path to living wages for workers in global supply chains. As part of their fair pay strategy, FLA developed a fair pay dashboard and wage data collection toolkit to help companies calculate employee income, understand the gap between actual and living wages, and progress over the course of the business Time to eat. The use of these tools led to the compensation changes described in the report. Today the tools are used by more than 60 major clothing and shoe brands.

The FLA believes that every worker is entitled to a regular working week sufficient to meet the worker’s basic needs and to ensure a certain amount of disposable income. The FLA Workplace Code of Conduct states that employers must pay at least the minimum wage or the appropriate applicable wage, whichever is higher, comply with all statutory wage requirements and provide all statutory or contractual services. FLA affiliates must take steps to gradually improve workers’ compensation when it is insufficient to achieve living wages.

The Fair Labor Association promotes and protects workers’ rights and improves working conditions by facilitating collaboration between companies, civil society organizations and colleges and universities. Established in 1999, the FLA conducts independent monitoring to ensure that strict labor standards are followed wherever its affiliates source their products by identifying the causes of labor violations and suggesting solutions to workplace problems.

Bill Furmanski
Association for fair work
+1 202-986-7185
[email protected]
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August 31, 2021 at 2:45 pm GMT

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