"Wages and benefits paid for a standard working week shall meet or exceed legal or industry minimum standards and always be sufficient to meet basic needs of workers and their families. In addition, some discretionary income (i.e. for savings) must be provided. Overtime must be remunerated separately, with the statutory surcharges. Other legal wage components such as paid vacation and holidays or special wages for the Chinese New Year must be guaranteed."
An obligation in and of itself is not enough, of course. Therefore, all our producers are regularly monitored by independent FWF auditors who carefully examine the remuneration of employees. This is done by checking payroll records and working time records. Interviews with workers are conducted for confirmation. VAUDE receives a detailed list of payment figures with local and international benchmarks. This helps us to quickly recognize the wage levels of our producers and whether we need to take action.
Inspections carried out by the Fair Wear Foundation show that our producers have a high wage level. They are far above the statutory minimum. Nevertheless, at all audits carried out in 2016, there were objections regarding "payment of a living wage", and discrepancies from the Asia Floor Wage were uncovered. This benchmark is being advanced because the minimum wage in many countries is not sufficient to provide a decent standard of living.
Our producers have high wage levels. You're surely wondering why there were deviations from the Asia Floor Wage (AFW). The Asia Floor Wage (AFW) always refers to the country as a whole; regional differences are not taken into account. However, regional differences in the cost of living are significant. For this reason we have decided not to use the AFW for our comparisons. Meaningful benchmarks for living wage are, unfortunately, still not available for all countries and regions so we have joined various working groups for the establishment of a living wage in order actively promote the issue.
We are already a step further in Vietnam - there's a new benchmark for fair wages this year. This was increased by the Global Living Wage Coaliton (GLWC) using the Anker method. Read more here. This benchmark applies to Region 1 and Region 4. Production site wages in relation to minimum wage and the new benchmark for fair wages.
Our producers in Vietnam have a high wage level and some are above the benchmark for fair wages. At our other producers, we are working to raise the level of wages.
Wages in different countries of production can’t be compared if they're listed in the local currency because it is never clear how much things cost there. For this reason, we have converted wages and minimum wages into their purchasing power. We have used the World Bank's conversion factor.
Wage data is collected by the FWF in audits. We do not know the starting wage per department. The FWF only collects the lowest, highest and most frequently paid wages in a department. The wages represented here are average pay for the most common job in the sewing department.
Because each producer is generally audited every 3 years, our current wage data is also only updated every 3 years.
»Fair wages continue to be a challenge. VAUDE is working intensively on the issue and is committed to the new Living Wage Incubator Project of the FWF.«
VAUDE is part of the "Living Wage Incubator" project. The Fair Wear Foundation launched this project in 2016 for dedicated members. The goals is to provide a platform for the member companies to exchange ideas on the subject and to learn from each other. At the moment we are working on a pilot project with a producer in Vietnam. You will be able to read more about implementation and the current state of the project in the next report.
In order to make progress on this issue with other like-minded brands, we are active in the Fair Wage project of the BSI/ GIZ in cooperation with the Ruhr-University Bochum. The aim of the project is to scientifically examine the issue of a living wage and to develop a methodology to create realistic benchmarks. This method is being used for the different regions of our country of production, Vietnam. It is helping us to improve our ability to assess the level of wages of our producers and to address our partners with specifics.