The need to create holistic pay structures that enable and sustain fair living wages and facilitate improved dialogue between employers and employees at the factory level is growing every day.
12 FAIR WAGE DIMENSIONS
Distinct from an audit approach, the Fair Wage Method focuses on partnerships with factories, stores, and brands to assess wage practices through worker and management surveys, identify root causes, and implement improvements, including within Human Resources policies and practices.
The Fair Wage standard is structured around and defined by 12 dimensions, which covers comprehensively the entire spectrum of wage indicators:
|1. Payment of wages||A wage which is regularly and formally paid in full to the workers.|
|2. Living wage||A wage that ensures minimum acceptable living standards.|
|3. Minimum wage||A wage which respects the minimum wage regulations.|
|4. Prevailing wage||A wage which is comparable to wages in similar enterprises in the same sector.|
|5. Payment of working hours||A wage that does not generate excessive working hours and properly rewards normal working hours and overtime.|
|6. Pay systems||A wage that leads to a balanced wage structure/composition between the basic wage and additional bonuses and benefits.
A wage that reflects different levels of education, skills and professional experience, as well as rewarding individual and collective performance.
A wage that complies with regulations on social insurance payments and paid holidays and is not dominated by disciplinary wage sanctions.
|7. Communication and social dialogue||A wage on which workers receive sufficient information in advance (through an individual work contract), in the course of the production process (through regular communication channels) and at the time of the wage payment (with a detailed pay slip).
A wage that is negotiated individually (with individual employers) and collectively – notably through collective bargaining – between the employer and the workers’ representatives who are freely accepted in the company.
|8. Wage discrimination and wage disparity||A system of equal wages for equal work that does not lead to wage discrimination and does not generate unjustified, too high and too rapidly growing wage differentials within the company.|
|9. Real wages||A wage that progresses at least in proportion to price increases.|
|10. Wage share||A wage that progresses proportionally along with enterprise sales and profit growth and which does not lead to a fall in the wage share in enterprise performance growth.|
|11. Wage costs||A wage whose progression does not lead to a dramatic reduction in wage costs within total production costs and as a percentage of employment.|
|12. Work intensity, technology and up-skilling||A wage that progresses along with changes in intensity at work, technological contents and the evolving skills and tasks of the labour force.|