• Ensure all PUMA employees are paid a living wage
• Conduct fair-wage assessments including mapping of a specific wage ladder for the top five sourcing countries to help improve their wage levels and practices
• Ensure bank transfer payments to workers for all core suppliers by 2022
• Ensure effective and freely elected worker representation at all core T1 suppliers

The strength of PUMA’s approach is to implement such a strategy on the ground by conducting Fair Wage assessments among its main suppliers, and to use these to help factories to carry out remediation around a number of KPIs. After 2018 and 2019 fair wage assessments, this exercise was renewed in 2021 among strategic factories in Bangladesh, Indonesia and Cambodia and extended in 2022-2023 to Pakistan, Vietnam and China, with some suppliers being certified as ‘Fair Wage employers’.

PUMA aims to progressively extend assessments to more markets, such as Turkey for 2024-2025, to cover more Core T1 factories, which have not yet paid a living wage to workers, and ensure progress on wage payment, living wage and human resources practices.

Non compliance with full payment of minimum wage is considered a zero-tolerance issue as per PUMA standard. To be onboarded as new supplier or to remain an active PUMA supplier, companies must pay minimum wages in line with local regulations.

PUMA requests their suppliers to pay a living wage to cover workers and their families’ basic needs plus some discretionary income’, and then also to report on progress towards achieving this aim.

PUMA has also been collecting wage data annually from its core Tier 1 factories for several years. PUMA used the FLA’s Fair Compensation Dashboard to analyze the wage data of 59 strategic Tier 1 suppliers n 2021, and 60 strategic Tier 1 suppliers in 2022, and compared them to living wage benchmarks proposed by different organizations like the Global Living Wage Coalition (GLWC). The FWN database on the living wage also allows a permanent monitoring of wage levels at suppliers and their capacity to reach at least the living wage benchmarks.

PUMA 2022 data covers approximately 75% of PUMA’s global production volume, and 145,834 workers. In 2022, 32 factories were found to pay a living wage to 83,089 workers in Cambodia, China, Pakistan and Vietnam, covering 45% of PUMA’s global production volume. Those 83,089 workers represent 13% of PUMA’s total supply chain workforce. This is an important achievement (see PUMA’s sustainability report ‘Our People’ for details, at ‘Fair Income’ section) that should progressively be extended to more suppliers and workers.

One of the key Fair Wage objectives is to ensure the full payment of wages, without retentions, without delays and without under payments. PUMA decided to guarantee that through bank transfers which is a common target for all its core suppliers before extending it to other suppliers. As a result, in 2023, 100% of PUMA core factories paid 224,444 employees digitally.

One of the sources of under-payment in global supply chains is often the non payment or under-payment of overtime hours, a situation which is more frequent when the number of working hours is extremely high, especially in peak production periods.  This is the reason why the payment of overtime hours is also clearly integrated in the PUMA Code of Conduct and is scrutinized regularly based on its Compliance Audit Program.

PUMA’s Code of Conduct also mentions Freedom of association and retained as Key Performance Indicators for its suppliers both free election of workers’ representatives and collective bargaining agreements.

PUMA code of conduct and FLA’s code of conduct are also insisting on non-discrimination in wage levels and wage practices, by gender, by ethnic origin or nationality etc.

This extends to the wage’s disparity between temporary and permanent contracts and this is why PUMA retained as another KPI for suppliers which is the progressive increase of the percentage of workers under permanent contracts.

For the first time in 2023, PUMA collected wage data by gender. No wage gap between female and male workers seem to be found at global level. Some slight differences of few cents of Euros can be observed in average wages per hour in Pakistan, China, Cambodia and Turkey, mainly because factories are paying higher wages for certain working positions predominantly filled by male workers, such as polishing, or in warehouse that require the use of chemicals or heavy lifting.

The Fair Wage Network conducts wage assessments and evaluates the wage systems of selected factories across 12 dimensions around which fair wages are defined, and which can be regrouped in five major areas: legal compliance, wage levels, wage adjustments, pay systems, and social dialogue and communication. https://fair-wage.com/12-dimensions/

It also assesses the place the wage policy takes within the company’s Human Resources policy and  sustainability strategy (considered as a 13^th cross-cutting dimension).

Since 2018, The Fair Wage Network has conducted fair wage assessments at PUMA’s core suppliers based in Bangladesh, Cambodia, Indonesia (2021), Vietnam, Pakistan and China at 27 factories in total (representing approximately 32% of PUMA strategic Tier 1 suppliers).

On the basis of the assessment carried out in 2021-2022, the FWN developed individual Fair Wage Remediation plans for six individual suppliers in 2022. This included engaging directly with the management and the workers for nearly one year, providing technical assistance, training sessions and concrete solutions on how to generate wage improvements. The project succeeded in improving wage-fixing mechanisms and pay systems, in developing a closer link between wages and workers’ skills and performance, and in establishing a better wage-adjustment process notably to price increases through proper collective bargaining on wage issues. These structural changes were essential to allow the company to progressively increase wages of all workers to the living wage benchmarks in a sustainable way that would not erode their competitiveness.

Some improvements were identified in the area of communication and social dialogue and the Fair Wage remediation plans -that were signed by all actors involved- gave a concrete opportunity to develop social dialogue in each supplier through a team composed of both management and workers’ representatives who were directly involved in the implementation and follow-up of such remediation plan.

Overall, workers’ satisfaction about wages and working conditions increased, with almost all workers being either ‘fully’ or ‘partly’ satisfied about their wages and working conditions, including encouraging results on retention and turnover rates.

After nearly one year of a remediation process, a new fair wage assessment was reconducted among those key suppliers in Bangladesh, Cambodia, and Indonesia. The results were much better than the initial assessment, showing that the remediation process carried out was successful. Out of the six strategic suppliers, four reached the necessary threshold to be certified as a Fair Wage employer.  Other suppliers were not far off from reaching the threshold and could reach it along a lighter road map over the following months.

In 2023, a new series of fair wage assessments were carried out in Bangladesh and China, firstly to determine their performance on the 12 Fair Wage dimensions, and then to identify possible areas where remediation would be required.